Foreign Policy
November 11, 2011
Greece's new interim prime minister, Lucas Papademos, was due to teach a class at Harvard this upcoming spring semester. The subject: "The global financial crisis: policy responses and challenges." For Greece's sake, let's hope its new professor-in-chief knows what he's talking about.
Papademos spent 25 years working as a central banker -- so he should be used to dealing with worrying statistics. But even this bespectacled, mild-mannered economist might be daunted by the numbers he has inherited -- and the mountains of red ink that will dominate his premiership. On Thursday, Nov. 10, a few hours before the 64-year-old economist accepted the invitation from an increasingly confused and desperate George Papandreou to succeed him as Greece's premier, the European Commission published a report on the Greek economy that made painful reading. Greece's public deficit is expected to reach 8.9 percent of GDP this year, while the economy is forecast to contract by 5.5 percent, capping off a third consecutive year of recession.
Most shockingly, public debt is predicted to soar to 198.3 percent of GDP -- almost double what it was in 2008 and by far the largest margin in Europe. In another ominous twist of fate, Greece also announced its August unemployment figures on Thursday. The jobless figure climbed to 907,953, or 18.4 percent, which means that about 1,000 jobs have been lost every day over the last year. Even Papademos won't be able to hold on to his job for very long -- early elections are due to be called toward the end of February. But is 100 days enough time to lay the foundations for an economic recovery?
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