Social unrest harms hopes of Greek reform

Financial Times
February 13, 2012

Sunday’s explosion of street violence in Athens underlines the danger that political disorder may undercut Greece’s attempt to implement the economic reforms required to avert a debt default, according to Greek politicians and economists.

“The message is very worrying,” said a senior socialist politician. “As long as the economic crisis persists, there is lack of trust in the government and unemployment continues to go up, the social unrest will grow.”

With Greece in its fifth consecutive year of recession and the nation’s eurozone partners frustrated at the slow pace of reform, the flames that burned dozens of buildings in the Greek capital are also licking at the nation’s future in Europe’s monetary union.

The underlying problem remains the inability or unwillingness of Greece’s political classes to confront the bureaucratic inertia, resistance to large-scale restructuring of the public sector, and tax evasion that have sabotaged reform efforts over the past two years.

Many of the measures approved by parliament in a dramatic vote on Sunday night are repeat attempts to hit targets missed or delayed in the 18 months since Greece first sought a financial rescue from its European Union partners and the International Monetary Fund.

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