The Financial Express

Of unkept promises  

| Updated: July 11, 2019 22:02:58

Evaly and Fianancial Express Evaly and Fianancial Express
Of unkept promises   

Four years ago Alexis Tsipras and his Syriza party became the first left government to sweep to power in Greece. He did so on the back of electoral promises of undoing austerity and throwing the European Union bailout implications out of the window. On Monday he was as ceremoniously swept out of power by an impassioned population. His successor Kyriakos Mitsotakis has been moderate in his promises. Those include more tax cuts and privatisation and these have taken the fancy of the Greeks. Yet Greece's turnaround albeit slow and tortuous that it was, had begun.

A moderate two per cent growth has been witnessed and the jobless rates were down from 28 per cent to 20 per cent. Yet the majority weren't happy because Tsipras did a volte face of his plans to do away with austerity and far from assigning the EU to the dogs he was forced to accept a third bailout package that was even more crippling in terms of mortgaging Greek assets.

Mitsotakis' role is greater than just creating jobs through tax cuts and privatisation. He has a precarious balancing act to perform to the expectations of his electorate as well as fulfilling the conditions laid down by the EU. He has to try to attract a brain drain of half a million Greeks that left the country and he has to operate within the realms of a parliament that is dependent on the EU to even frame its laws. With Angela Merkel's wings clipped, Mitsotakis will have to depend a lot more on a softening of the hawkish stand of Merkel's coalition partners that never liked the bailout packages to begin with.  The reality is that most of the money came from Germany and now there are more worries about the Italian economy that seems to be heading the same way as the Greeks.

To be fair Tsipras was threatened with a shut-down of his banks if he eschewed the anti-austerity measures, probably something he hadn't envisioned while campaigning. Mitsotakis has been careful not to tread that path even to the extent of not promising a roll-back of pensions that have been almost halved as part of the bailout. But it is a measure of promises unkept that has tried the Greek patience at a time when matters seem to be turning around for Greece.

As it is, with most assets mortgaged the Greeks will have to bend backwards to find enough state-owned organisations to privatise. The silver-lining will be a willingness by investors to enter the fray given the tax cuts,  enormous tourism and shipping potential that the country has. That and a firm crackdown on the massive tax evasion that characterises the country may provide the New Democracy of the centre right government a chance to redeem its pledges.


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