{"id":487,"date":"2015-07-02T10:28:20","date_gmt":"2015-07-02T10:28:20","guid":{"rendered":"http:\/\/global-labour.info\/en\/2015\/07\/02\/all-we-are-saying-is-give-greece-a-chance-frank-hoffer-2015\/"},"modified":"2015-07-02T10:28:20","modified_gmt":"2015-07-02T10:28:20","slug":"all-we-are-saying-is-give-greece-a-chance-frank-hoffer-2015","status":"publish","type":"post","link":"https:\/\/global-labour.info\/en\/2015\/07\/02\/all-we-are-saying-is-give-greece-a-chance-frank-hoffer-2015\/","title":{"rendered":"All We Are Saying Is Give Greece a Chance – Frank Hoffer (2015)"},"content":{"rendered":"


\nAll We Are Saying Is Give Greece A Chance!
\n<\/strong>
\nby Frank Hoffer on 1 July 2015
\n<\/strong>
\n<\/em>
\nGreek unit labour costs are down to the level of 2006, pensions have been slashed, the budget deficit largely eliminated, public sector employment has been reduced by 25%, determination to improve tax collection and deal with tax evasion is stronger than ever before, labour markets have been liberalised, bureaucratic barriers for entrepreneurship have been lowered.
\nReal output, at the end of 2014, was below its 2000 level, marking a more than 26 per cent plunge from its peak in 2007, while an even larger fall\u201430 per cent\u2014in employment has been recorded. More than one million workers have lost their jobs relative to the previous peak in 2008, with an increase of 800,000 in the unemployed \u2013 the total now stands above 1.2m \u2013 while the active population is shrinking, as workers leave the country in search of better opportunities abroad. Real wages have fallen by more than 30 per cent during the last five years.
\nWhatever one thinks about the austerity policies of the Troika, there can be no doubt that many of them have been implemented in Greece. To say Greece has done nothing is propaganda, pure and simple.
\nSure, there is much that can be improved in Greece; the remaining reforms cannot, however, be implemented overnight. At least Athens \u2013 unlike Berlin \u2013 does not have an airport that has overrun budgeted costs by \u20ac5bn and, instead of opening in 2012, is now set to open in 2018 only. Incompetence and mismanagement are not a Greek privilege.
\nThe patient has swallowed most of the medicine, but is sicker than ever. The doctors, while highly paid, have proven themselves to be utterly incompetent. Their prognosis was wrong: recovery did not happen. Not all of the medicine was mis-prescribed. The Greek pension system needed streamlining, public administration needs to be improved, tax collection needs to be strengthened etc\u2026 But there was a clear over-prescription of austerity measures and an accompanying lack of the investment needed to restart the economy.
\nIn January 2015 the patient revolted. Thank God most Greek people turned to a pro-European, pro-democracy and anti-poverty party and not towards a xenophobic fascist alternative. The new government naively assumed that the crisis was about economics and that after five years of failure there would be some willingness to consider that more of the same was not the solution.
\n\u201c
\nProlonging the current failed programme, extend(ing) economic hardship beyond reason and prolong(ing) the agony and the divisive tensions between debtors and creditors would be disastrous.
\nThis is not the conclusion of Yanis Varoufakis or Alexis Tsipras, but a recent comment from Dominique Strauss-Kahn, whose economic competence as a former head of the IMF is \u2013 despite his moral failures \u2013 never questioned. It seems that keeping Greece in the Euro will be impossible with a continuation of the failed policies of the past. The Greek government needs a genuine chance, one which it has not been given so far.
\nThe Greek government, voted into power by a majority of its citizens, is being humiliated by the creditors\u2019 demands; the Eurogroup is annoyed that the government is rejecting its \u201cgenerous\u201d offer. The last few weeks have been a dialogue of the deaf and the level of misunderstanding is high. Reading the latest proposals and counter-proposals, some of the Eurogroup\u2019s proposals do not look as generous as claimed. On 22 June the Greek government, for example, proposed to the creditors :
\n\u201c
\nThe authorities will review through a consultation process the existing frameworks for collective bargaining and industrial relations taking into account best practices elsewhere in Europe. Further input to the review described above will be provided by international organisations including the ILO.
\nAnd that is how it reads in the famous \u201ctake it or leave it\u201d proposal of the Eurogroup four days later:
\n\u201c
\nLaunch a consultation process similar to that foreseen for the determination of the level of the minimum wage (Art. 103 of Law 4172\/2013) to review the existing frameworks of collective dismissals, industrial action, and collective bargaining, taking into account best practices elsewhere in Europe. Further input to the review described above will be provided by international organisations, including the ILO. The organization and timelines shall be drawn up in consultation with the institutions. No changes to the current collective bargaining framework will be made prior to the conclusion of the review and in any case not before end-2015. Any proposed changes to the legislative frameworks will only be adopted in agreement with the EC\/ECB\/IMF.<\/em> (italics FH)
\nThis does not really show a spirit of compromise, but seems prescriptive, restricting the policy space of an elected government. The narrow micromanagement of Greece is neither economically necessary nor democratic. It is justified by the argument that external technocrats can impose better policies upon Greece. Having failed for five years, one wonders what it is that gives them the confidence to deny the democratically elected Greek government the possibility to review and \u2013 if they deem necessary \u2013 to change their labour market regulations.
\nAngela Merkel repeated on Monday her statement: \u201cif the Euro fails, Europe fails\u201d. But if that is the case, why is she acting as she does? Greece is only the tip of the iceberg. A common currency without coordinated fiscal, taxation and economic policies and yes, without transfers between countries, is not sustainable. Grexit will do unforeseen damage to the Euro and to European integration. It will show that what was meant to be an irreversible process of closer integration is, in fact, reversible.
\nA future historian might ask why the larger European governments and in particular Angela Merkel and her social democratic partners in Germany allowed a tiny country such as Greece to trigger the unravelling of the European project. Was it lack of economic understanding, narrowly defined national interests, political hostility towards Syriza, semi-religious belief in the magic of \u201cordo-liberalism\u201d, fear of an electoral backlash or incompetence?
\nGermany has gained significant political power during this crisis, but has also lost political sympathy in many crisis-hit countries. This is probably the crucial moment for investing political capital in moving Europe forward and overcoming some of the bitterness and resentment created during this crisis. Forget about the unpleasant negotiations of the last months and some personal animosities. The stakes are too high. It\u2019s time for a pragmatic and open-minded restart.
\nGiven the urgency we need a simple and workable solution instead of endless debates about whether the corporate tax rate in Greece shall be 26, 28 or 29 per cent. There is also no point in the public creditors constantly negotiating with Greece about new credits, the sole purpose of which is to pay back the old credits to the same institutions.
\nDominique Strauss-Kahn made a simple suggestion in this respect:
\n\u201c
\nMy proposal is the following: Greece should get no more new financing from the EU or the IMF but it should get a generous maturity extension and significant nominal debt reduction from the official sector.
\nThis would still mean tough times ahead for Greece, but it would give the responsibility back to the Greek people and their government(s) to live within their means. It would give them the time and space to implement the changes needed to rebuild their economy. It would also ensure that the creditors do not lose all their money. It is certainly a better alternative than Grexit or continued agony. For the sake of Greece and the sake of Europe they need this chance. Better Syriza succeeds than Europe fails!
\nIn the heated public atmosphere this will be a hard sell to the public in Germany and other countries, but Angela Merkel is a skilled political leader and, together with her coalition partners, she can do it. Otherwise she might end up being known as the woman who lost Europe.
\nFrank Hoffer is senior research officer at the Bureau for Workers’ Activities of the ILO. He writes in a personal capacity.<\/em>
\nThis article appeared in Social Europe <\/a>of July 1, 2015<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[70],"tags":[],"_links":{"self":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/posts\/487"}],"collection":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/comments?post=487"}],"version-history":[{"count":0,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/posts\/487\/revisions"}],"wp:attachment":[{"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/media?parent=487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/categories?post=487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/global-labour.info\/en\/wp-json\/wp\/v2\/tags?post=487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}