Barroso in Athens to handle ultimatum and face a new ‘oxi’

© European Communities 2009

Barroso in Athens to handle ultimatum and face a new ‘oxi’


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European Commission President Jose Manuel Barroso is set to visit Athens tomorrow according to an announcement of the European Commission yesterday. Brussels sources expressed the certainty that Barroso will explain to Prime Minister Andonis Samaras that unless Greece performs a "big bang" in the coming weeks, the country should not count on the September disbursement of the (big) mega loan trance as scheduled. Indeed, EU observers who visited Greece a couple of weeks ago, concluded that none of Greece's obligations were fulfilled.

In this context, it should be noted that there are certain important quarters in Brussels and Berlin who now believe that Greece is a "lost case" no matter what Europe does, and any assistance, under any form, goes "down the drain" without any hope for recovery.

The number one problem the new tripartite Greek government has to address is the down-sizing of the public sector. For Greece's lenders, it constitute the crush test that the country has to pass in order to continue get financing. The present Greek government is definitely, politically unwilling to take any action in this direction, even symbolic, by dismissing 10,000 out of the over one million employees.

An equally important test for Greece is to begin privatising, or closing down state enterprises. To give an idea of the magnitude of the problem, one of them, train company OSE, without offering any real public service (Greece is full of mountains and domestic transport needs are served by buses and trucks) has a deficit paid by the state budget of over €1 million per day. And this is one of the thousands of state enterprises and organisations Greece must get rid of.

Under the circumstances, no matter what threats Barroso brings to the Greeks, will have no result and will get from the Greeks an indirect yet clear OXI (no) or a mild "yes Sir" yet without any delivery. Civil servants and employees of state enterprises are the basic cards of the parties in power, in reality they are the parties in power. Thus despite previous promises and commitments, the Greek government under its present configuration, the last thing that will do will be to succumb to Barroso's ultimatum and start dismissing civil servants or privatising state enterprises.

At this moment the Greek political outlook is quite simple. Greece will not meet any of the basic requirements of the memorandum signed with the EU in terms of down-sizing the public sector and getting rid of state enterprises. Under the circumstances it is unlikely that EU financing will continue after August and Greece will be led in bankruptcy and out of the Eurozone. The question is whether bankruptcy and return to the drachma will be the last act to be performed by the current tripartite government, or if Samaras will go to elections to handle power to the communist left and let it do the dirty job.

Knowing personally Samaras for more than a couple of decades, I will not be surprised if he takes advantage of Barroso's ultimatum and make his heroic exodus now, in mid summer.

Kassandra K

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