Monday, 18 June 2012

Another breathing space

With the UK press unable to decide whether to be upbeat or downbeat on the outcome of the Greek elections, the Indie includes a hint of trouble to come;
The near dead-heat in the election does not bode well for decisive government in Greece. Pasok and the coalition with New Democracy implemented tax rises and wage and pension cuts but stalled over reforms such as privatisation or dismantling the system of Tammany Hall-type cronyism and jobs for votes that had previously been at the heart of the political system.
In other words, the corrupt actors who got Greece into this mess in the first place need to reverse their own corruption to meet the austerity targets insisted upon by Germany. It is savage irony that it has been German firms who have largely benefited by grossly overpriced contracts and kickbacks in the past; a former Socialist Party defence minister is accused of pocketing $24m in bribes for a submarine order with German firm Ferrostaal, and Siemans has had to agree a payback of $355m for past corrupt payments. Corruptly inflated contract prices are estimated to have cost Greece over $2.6bn during the 1990s alone. 

The catch-22 faced by New Democracy and Pasok is that corruption is widely tolerated in Greece so long as there is a trickle-down, so long as everyone gets a snout in the pork barrel. If everyone shares, they turn a blind eye to corrupt politicians. If those same politicians take the pork barrels away, the electorate's tolerance of corruption disappears, and bent politicians find themselves very exposed and vulnerable. 

So whilst ND and Pasok politicians can no doubt take a huge corrupt skim of the $50bn capital proceeds of privatisations demanded by the IMF, they lose the opportunity to give out State jobs in grossly overmanned enterprises such as the water companies, which will have to shed jobs and cut costs once privatised. That not only means lost votes, but real anger and retribution from a volatile and energised electorate.

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