Tuesday, October 20, 2009

Would you buy a used car from this man?

During the recent election campaign the centre right New Democracy ran the slogan "Apofasi Eythynis" - "The Responsible Choice" and made much of the fact that they alone could be trusted with guiding the country's economy through the rough days ahead. Indeed this was virtually the only slogan to grace the thousands of billboards featuring a heavily photoshoped portrait of prime minster Costas Karamanlis that sprung up in the weeks leading up to the October 4th vote.

It seems now that the promise was made in bad faith. Despite swearing blind to Greek voters, the parliament, European Union, Eurostat, lenders and anyone else who'd listen that the country's public borrowing for 2009 wouldn't exceed 3.7% of GNP figures presented by the new PASOK administration seem to show that the figure is likely to be between 10 and 12% of GNP. A discrepancy which has prompted the EU's economy commissioner, Joaquin Almunia to order an inquiry into how the New Democracy government cooked the books on this particular deal.

The money markets less restrained by political and diplomatic considerations were not fooled by the previous government's creative accounting and so downgraded the country's credit rating to the lowest in the Eurozone, making the cost of further public borrowing even more expensive.

No wonder Karamanlis decided on a quick election despite intense opposition from within his own party. Unlike everyone else the country's leadership knew that the lid was about to blow on this financial mess and that if they didn't take the money and run soon the electoral consequences would be even more dire. The policy seems to have been lose the elections, let the opposition deal with the mess and take the blame for the austerity measures that will be imposed on Greece in return for further lending. Then when the electorate starts to lose patience present yourself as a more reasonable alternative.

A fitting tactic for an administration that managed to get itself mixed up in over 50 scandals in just two years.

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