Greece under pressure: Aris Ikkos

Debt-stricken Greece is set to go to the polls again after parties failed to agree on a new government. Here, Aris Ikkos from our panel of residents shares his view on the latest twist in the Greek drama.

15 May 2012

Aris Ikkos

Aris Ikkos
  • Age: 51
  • Location: Palaio Falero, Athens
  • Profession: Consultant in the hotel and tourism industry

The collapse of the talks is very disappointing. It's a disaster. Politicians have not lived up to the requirements of the times.

I haven't got a clue about who I will vote for in new elections. So far I have found all politicians have fallen far below expectations.

I think Syriza may well win the election which would not be a good thing. They are promising the impossible. They say they will break our side of the bailout agreement but expect the other parties to hold their side. It's a completely irrational stance.

Greece needs fundamental economic change. We should shift from an old client-based economy to a more rational structure. The discipline imposed by the euro is a good thing in this regard.

My worry is that we could be forced out of the euro. If we continue to run budget deficits but are no longer able to claim bailout money, then the only way out is to print money.

I don't agree with those who say leaving the euro could be a good thing. Continuous devaluation makes you continuously poorer. We don't have large amounts of raw material that would benefit from competitive devaluation, unlike a country like Argentina.

Uncertainty is disastrous for the business environment. Consumers don't spend unless they have to. All investment decisions will keep being postponed. The EU and the media haven't helped with constant questions about whether Greece will remain in the euro.

I am somewhere between disappointed and desperate.

8 May 2012

The leader of Greece's left-wing Syriza party is to try to form a government after parties backing an international bailout deal failed to assemble a coalition.

This election outcome will either lead to a broader pro-European coalition, for which I am hopeful, or new elections, which I think would be disastrous.

The entry of a neo-Nazi party in parliament with a very high percentage marks a sad day for the country.

It signifies the failure of the current Greek democracy to provide for the unemployed and the non-privileged, particularly amongst the young.

It is a very confusing and rather unexpected situation here after the elections.

11 November 2011

As new Greek Prime Minister Lucas Papademos sets out the priorities of his incoming coalition cabinet.

Lucas Papademos is a good choice, in that he is accepted (even if reluctantly by some) by the two main parties (Pasok and ND) plus LAOS, as well as being a person respected by the EU institutions and the financial world.

In that respect, he can make a decisive contribution to putting Greece back on the right European track.

Of course, a lot will depend on the extent to which the parties will back Mr Papademos' government and whether society at large will actually support it in implementing policies of rationalising the Greek economy.

I hope that the prospect of Greece leaving the euro, in a state of uncontrolled default, will lead us all to focus on moving the country forward.

To do so, it is essential to reduce public spending in a rational manner, rationalise our tax system, which has some of the highest tax rates and yet, due to tax evasion, a rather low tax/GDP ratio.

We also need to liberalise economic forces so that they can cover the void left by a de-facto shrinking public sector.

As for society at large, the situation has become markedly calmer in Athens since the referendum was announced and the spectre of leaving the euro was faced.

6 November 2011

Following crisis talks, Greek Prime Minister George Papandreou agrees to step aside for a new coalition to lead the country.

As the ancient Greeks used to say: "Necessity knows no law".

Start Quote

If the parties focus on the issues rather than be populist, this will be a turning point in modern Greek political history...”

End Quote

For once in this crisis, the parties and their leaders have faced the issue of finding a solution.

Both leaders gave way - Prime Minister George Papandreou by resigning from his post, and the leader of the opposition Antonis Samaras by not insisting on immediate elections but accepting that the coalition government will have to carry through an agenda securing the 27 October bailout agreement.

The new government to be formed will - under immense pressure from a very difficult situation - hopefully address the issues and not be ill-fated like the "Zolotas ecumenical government" of 1989-1990.

If, under this pressure, the parties focus on the issues rather than be populist, this is a turning point in modern Greek political history, particularly since the restoration of democracy in 1974.

1 November 2011

Six leading members of Greece's governing Pasok party call on Prime Minister George Papandreou to resign after he announces a Greek referendum on the latest aid package aimed at solving its debt crisis.

I think Mr Papandreou would prefer to go down than form a coalition government; when he approached Antonis Samaras, the leader of the opposition, in June so as to form an emergency coalition government, the latter considered it a good opportunity to raise his profile by leaking to the press that Mr Papandreou had offered him his resignation from the PM position.

But since then - and actually before as well - he has said "no" to everything and has not offered a credible alternative.

From a political perspective, the planned referendum is possibly the only way out from the current impasse, where all the opposition parties and a large part of the population scream "no" to all agreements that have been made so far.

Start Quote

From an economic perspective, the uncertainty created for the next three months is immense.”

End Quote

These same groups have said this but without offering any real alternatives, and have, simultaneously, added a "sovereignty" dimension to the EU agreement of last week.

From an economic perspective, the uncertainty created for the next three months is immense.

Looking to the future, if the referendum turns out positive, so a "yes" for the aid package, the economic and political landscape will become a lot more favourable for economic stability and development.

If, on the other hand, it turns out negative, so a "no" for the aid package, all financial hell will break loose, and probably not just in Greece.

All in all, it is a very high stakes gamble in the face of a total collapse of the Greek political system, which has been unable for months now to face the issues, let alone solve them.

19 October 2011

The Greek parliament gave initial approval to new austerity measures, as clashes broke out between protesters and police in Athens. A 48-hour general strike paralysed the country and a march by tens of thousands of people outside the parliament turned violent.

"To have strikes and demonstrations when incomes are slashed is hardly surprising. What is surprising, however, is that we almost exclusively have strikes and reluctant votes in the parliament and there is no serious public discussion about what to do (in the sense of produce) to restore incomes to their previous level, or share what is available fairly.

"Everybody seems to be fighting for retaining positions that are no longer sustainable, simply because the world has changed drastically, and discussing irrelevant issues.

Start Quote

Metaphorically, I get the impression that we have been through a major earthquake”

End Quote

"Metaphorically, I get the impression that we have been through a major earthquake, which has also caused a fire and a flood in our home. While this is happening, instead of fighting the fire and trying to control the flood so that the house does not fall on our head, we blame each other for the disaster that has befallen our head, and are discussing whether the high electricity bill of a few months ago was due to party A having left the heating on or due to party B having installed the wrong type of equipment. And our 'saviours' (the troika) spend most of the time telling us that we don't have the funds to fight the fire which is about to spread to their homes as well.

"I am writing these lines from Istanbul where I had to come by car for a conference I am attending and speaking, as my flight was cancelled due to the air traffic controllers' strike. It is my fourth visit here since 1992 and the progress I see every time I visit the city is striking. It drives further the point that adapting to the environment is the only way of surviving and progressing."

12 October 2011

Following news that political rivals in Slovakia agreed to support a crucial bill ratifying changes to the EU bailout fund in exchange for early elections. The bill was rejected only days before in a first vote, after a coalition party and the main opposition abstained.

Start Quote

In my view...the real issue is 'should we save Europe?'”

End Quote

"So long as the whole debate is being posed on the basis of 'should we save Greece?', it is not surprising that Slovakia initially voted against it.

"In my view however, the real issue is 'should we save Europe?'. In this respect, even if the European Financial Stability Facility (EFSF) is not perfect, it will keep the euro-ship afloat until a more permanent or correct solution is found.

"Of course, this does not absolve us (Greece) from doing our bit by rationalising our economy and understanding that the world has changed and, therefore, our society must adapt to the new world by becoming more competitive and less dependent on transfers.

"Neither does it absolve Germany and the other countries pursuing a strict 'punish Greece' approach from having to do their bit to address the banking crisis (which was not created by Greece) and the need to recapitalise banks (which were left to act imprudently by policy makers in the financially developed countries), as well as of the need to create the mechanisms necessary for a currency union."

Added note to reflect the turnaround in the Slovakia vote:

"The fact that the Slovakian parliament has found a way to overturn its earlier decision at the second vote, puts an even greater shame on our political system that continues bickering and scapegoating each other instead of sitting down to discuss strategy and practical measures to address the crisis facing the country."

3 October 2011

Following the Greek government's announcement that it is unlikely to meet the target and that the jobless rate was expected to rise

Start Quote

Things could have been different if, early on, some privatisation had been accomplished”

End Quote

"I am not surprised the recession is deeper than initially foreseen, as due to the economic uncertainty and lack of prospects, the mood is very negative in the country.

This has resulted in a postponement of consumption and investment.

However, this is not something that has happened on its own, but is largely the result of specific policies that have focused exclusively on reducing the deficit by raising taxes.

This has often been done in a haphazard way that jeopardised medium to long-term prospects for reducing the deficit.

Things could have been different if, early on, some privatisation had been accomplished, rationalisation had started at the public sector and the private sector had been left to fill the economic void created by a de-facto shrinking public sector."

30 September 2011

After the German bailout vote

The fact that the vote was passed gives me a sense of comfort for the short term.

But in the medium and long term we need to address some fundamental problems in Greece and in Europe. Politicians in Greece have taken the easy measures like increasing tax rates and reducing wages but have not addressed the issue of restructuring the economy.

The public sector is shrinking due to the fiscal crisis but they have not made any moves to make space for the private sector to fill the void.

In Europe leaders have not addressed the main issue of recession and unemployment and are single-mindedly focused on saving the banks.

We should stay within the euro - to leave would be disastrous. But we should restructure the economy. We have to rationalise the public sector and create a more efficient and fair tax system. Privatisation should be done not just to generate money, but also to help with development.

29 September 2011

Before the German bailout vote

"For this particular vote my hope is that it goes through. From a wider perspective I hope that Europe changes course and gives priority to countering the recession and unemployment rather than fighting about inflation and saving the banks.

The main problem is not the rescue package per se but the inability to see the end of the tunnel.

I think we can pay back the money, provided there is a change of policy which, as a bare minimum, would include a rationalisation of the public sector, pro-business policies and full use of currently available Community Structural Funds."

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