The consequences of the current government have become crystal clear in the past few days.
The rejection of the CEO nominee for Piraeus Bank from the European supervisory authorities, followed by going through the same process to find a new candidate, along with the removal of all of the Hellenic Financial Stability Fund board members reveal how control of the Greek banking system has been lost.
This is nothing else other than the result of the recapitalizations that were required after the economy was derailed twice during the 18-month governing from Tsipras.
Without a doubt, the Greek banks are now owned by the European Central Bank and their foreign shareholders.
Truth be told, Greek sovereignty of our banks has been lost.
And with, sovereignty over the Greek economy.
The upcoming deal on the management of non-performing loans as well the new authorities of the new privatization ‘superfund’ overlooking the broader public will result in the Greek economy literally changing hands.
A wave of buy-outs, mergers and restructuring will follows, where the foreign-controlled banks and state enterprises will play a central role.
According to the president of Eurobank N. Karamouzis, in five years there will be larger business groups, foreign shareholders will play a central role in Greek entrepreneurship and Greek politics will have a limited influence on the country’s economy.
In other words, Greek politics will cease to have control on the largest and most dynamic sections of the economy and be limited to managing the State mechanism, public finances and the administration of taxes.
But in these fields, Greek politics will be confined by predetermined goals and certain targets to ensure fiscal stability.
It is unfortunate the shift of circumstances have not yet been realized and in any case Greek politics seem to be out of tune with what is going on in the economy.
The people hover can realize the political world’s extent of responsibility, particularly those in government, who cannot explain why after all that fiscal reform burden and efforts for structural change, the results have not come as expected.
Greece has achieved and infinitely greater and deeper reform than Portugal and Ireland, yet it enjoys nothing but distrust and suspicion.
During the crisis Greece has reduced its fiscal deficits from 14.5% of the GDP to perhaps less than 3%, while also achieving minor primary surpluses. It has also improved competitiveness by reducing unit labor costs by 22%. The country has also turned the balance of payments deficit which used to amount to 15% of the GDP into a minor surplus and it has also restricted the interest burden to 7% of the GDP.
Ultimately, it is the unreliability of the government and the political system as a whole which prevents capitalizing on such a major reform.
That is our fundamental difference with Ireland and Portugal.
So long as the lack of political credibility remains an issue, there is no way we will prosper. Rather, we will witness the constant loss of national sovereignty, especially by people who act in its name.
Antonis Karakousis
Originally published in the Sunday print edition
