Greek Reforms 'Like Putting a Band-Aid on a Mortal Wound'
The main post office in Athens' Syntagma Square which was damaged in Wednesday's riots.
Greece may have averted the worst by passing an austerity package on Wednesday, but the government of Georgios Papandreou will continue to face massive public resistance to its course. German commentators warn that Athens isn't out of the woods yet.
For German Chancellor Angela Merkel, it was "really good news." But many Greeks, it would seem, beg to differ.
The news that the Greek parliament had passed Prime Minister Georgios Papandreou's latest package of austerity measures prompted particularly brutal rioting in the streets of Athens on Wednesday. Demonstrators clashed with police into the early hours of Thursday. Protesters attacked a post office in the Finance Ministry building, while riot police fired tear gas and even threw stones back at demonstrators.
The €28.4 billion ($41 billion) austerity package foresees €15 billion in additional tax revenues over the next five years, combined with savings of over €13 billion through cuts in social benefits and in the public sector. Privatization of state assets will provide an additional €50 billion. The Greek parliament had to pass the package in order to receive the next tranche of aid from the European Union and the International Monetary Fund, otherwise the state would have gone bankrupt within the next few weeks.
The parliament will also vote Thursday on laws relating to the implementation of the austerity measures. Although Wednesday's vote was greeted with relief in the rest of the euro zone, and caused the euro to rise to its highest level against the dollar in weeks, Papandreou will continue to face pressure from the Greek population, many of whom are deeply angry about the austerity program. Resistance from the country's powerful unions is expected, and further street protests seem inevitable.
On Thursday, German commentators analyze the significance of Wednesday's vote.
The center-right Frankfurter Allgemeine Zeitung writes:
"When the details of the first international aid package for Greece were being negotiated last year, a certain warning was often heard. The argument was that the multi-billion-euro bailout for Athens was dangerous because it would encourage other spendthrift euro-zone members to act even more irresponsibly. The Greek example, they said, would demonstrate to the continent's careless economic managers that in the end neglecting their duties would be rewarded rather than punished."
"In fact, the Greek example may already have had the opposite effect. No prime minister would want to pay the price that the Papandreou government has had to pay, if they can help it. Greece has had to sacrifice its national sovereignty to a degree that is far greater than is usual or necessary for a member of the European Union. For months, the Greeks' elected representatives have not been able to independently make any decisions of consequence. ... Indeed, for the foreseeable future Greece will only be a limited democracy. The Greek population can vote for whoever they want -- it won't really change anything."
The center-left Süddeutsche Zeitung writes:
"The whole Greek system has collapsed. Papandreou's austerity package, passed by the Greek parliament with so much drama on Wednesday, will not change anything, at least not in the short term. This reform package resembles a first-aid kit that is intended to cure a mortally wounded patient with a few band-aids and some analgesic spray."
"The country does indeed need a radical cure, but it would be so painful that it could probably not succeed any time soon. Greece would need new leaders who distance themselves from the old cliques, responsible elites who leave their money in the country instead of stashing it in Swiss bank accounts, a judiciary whose rulings do not take decades to be delivered, citizens who do not sell their votes for a job in the civil service and universities that prepare students for the globalized job market instead of unemployment."
"Is that a utopian vision? There are few signs of a new generation of politicians, managers, judges and councilors. But what would the alternative to this Greek revolution be -- a national bankruptcy in a year's time or later, when the coffers are once again empty and the loans have run out?"
The left-leaning Berliner Zeitung writes:
"Sheer chaos and an uncontrolled implosion have been averted. The Greeks have given themselves and the world time to take a breather. But the danger still hasn't been allayed, and the real work is still ahead. Passing laws in parliament is one thing, but putting them into practice is another. The pressure from the streets of Greece is immense, the opposition tenacious. Sooner or later Prime Minister Papandreou will reach his limits."
"And the rest of Europe? They have their hands full with crisis management … The case of Greece dispels two delusions -- that the currency union can't be a transfer union, and that there can be a common currency that functions without collective financial and economic policies. Those who ignore this, be it out of convenience or fear of voters, are risking far more than just Greece."
In a guest editorial for the business daily Handelsblatt, Rolf J. Langhammer, the vice president of the Kiel Institute for the World Economy, writes:
"For Greece, this is now the dawn of a crucial phase. After the rigorous austerity package was approved by the parliament in Athens yesterday, it must now be followed by concrete measures to assist the country in finding an orderly way out of the debt crisis. In addition to spending European bailouts on repaying foreign loans, it is above all new investment that is necessary to provide the Greek economy with a solid foundation."
"The troika of the EU, IMF and ECB has so far presented no Plan B for the sustainable recovery of the country. … The country's dilemma is that what Greece has to offer, other countries can also offer -- and in view of the unsettled situation, perhaps with a higher level of reliability. If the resistance to continued privatization of state property continues, this negative trend will not change. … If Greece is not integrated into a comprehensive growth plan, European taxpayers will in the end have to cough up twice -- for the banks affected by the Greek crisis, and for foreign investors. There are cheaper ways of solving the problem."
The left-leaning Die Tageszeitung writes:
"The ratings agencies could deliver the death penalty for Greece by declaring it bankrupt, and thereby cause a new global financial crisis. … The current plan for the involvement of banks in the costs of a bailout guarantees (the banks) that Greece's worthless bonds will be repaid in full and relieves them of any risk associated with a default -- the taxpayers will have to cover that, as usual. It also promises the banks generous and guaranteed interest payments, paid out by the already ruined Greece. How exactly that will work is anyone's guess. European financial policy makers don't know either."
"Hello? Who is actually calling the shots in European politics? A handful of analysts, apparently. And as we saw during the Lehman Brothers crisis as well as in the current euro crisis, they don't know much more about the financial health of companies and countries than the average politician."
The conservative Die Welt focuses on the impact the euro crisis is having on European unity:
"It is true that a tremendous amount was at stake and that a 'no' in the Greek parliament could have brought an end to the euro and caused serious damage to the EU. Under those circumstances, there appears to be no other alternative than to carry on (with bailout policies) as we have up until now. Politicians and government officials can soberly tell us that, once again, there was no alternative for the EU and national governments. They will also say that those countries are on high alert and currently are in the process of developing highly effective procedures for avoiding future crisis that take all eventualities into consideration."
"That may be the case, but they aren't providing the slightest amount of transparency ... It is precisely here that the problem lies -- and not in the apparent anger of a million little German 'paymasters' who are tired of financing negligent Southern European states. We are seeing -- historically, politically and to a certain extent socially and politically -- the necessity of the EU, and it is something we want. But we don't understand it. We're starting to distrust politicians who are insistent in their refusal to explain the EU because they don't feel they need to."
"For some time now, Europe has been more of a burden than something that is wanted. Political integration and insights into the meaning and goals of the EU are often limping miles behind economic integration. That distance is constantly growing, and that is extremely dangerous, because eventually the point will be reached where the patience of the European people has been exhausted. That wouldn't necessarily lead to populist revolts, but it would cause the foundations of the EU to crumble. As terribly banal as it may sound, it is crucial that the EU once again become a political project in the classical sense. The EU is in need of a rethink."
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