Greece No Closer to Bailout Funds After Ultimatum
The so-called “troika” of lenders — the International Monetary Fund, European Union, and European Central Bank — tried to be polite in its frustration with Greece in a statement on Monday, saying, “While important progress continues to be made, policy implementation is behind in some areas.”
The country agreed to a series of reforms during the euro crisis as conditions of its bailout, though progress has been slow to the point of non-existence. Failure to divest its state-owned gas industry encapsulated the struggles facing the island nation, and Fredrik Erixon, head of the European Centre for International Political Economy in Brussels, notes the difficulty of the situation, telling The Irish Times: “The long-term problem is that the fiscal plan for Greece is entirely implausible. There’s a charade going on between the troika and the Greek government and there will be further bumps in the road regarding future bailout payments.”
Greece needs to money to hang on to economic life. Its national health insurance has come up 1 billion euro short per year in its budget, requiring the already cash-strapped country to allocate scarce fiscal resources to simply keep the company afloat.
A failure to trim public employees has also set back Greece. A corrupt and well-entrenched government system has resulted in jobs being doled out to only the connected and politically fortunate.
Napoleon Maravejas, a professor for political and administrative sciences at Athens University, told Deutsche Welle that clientelism is still a problem facing the public sector in Greece.
“The desired administrative reforms are necessary, but they’re very difficult to implement politically,” he said.
Maravejas’s sentiments are representative of the larger political picture in Europe, where struggling countries in need of money — most notably Greece and Portugal — have had political inaction in the face of the need to reform so that they might remain in the euro zone.
Portugal’s government faced a serious setback when the leader of the minority coalition party resigned, citing the incoming treasury secretary’s support of austerity as the reason for his departure. In Greece, the ruling coalition fractured over a spat regarding the public broadcast company, leaving Prime Minister Antonis Samaras’s ability to govern all the more in question.