“The political parties should speak the truth to the Greek people”

Άρθρα Κωνσταντίνος Γάτσιος

How do you assess the course of the third adjustment program? Both from a public finances as well as a reforms perspective?

The conception of the third adjustment program has been more than unfortunate, with the Greek government being mainly responsible for it. The implementation of the program was bound to encounter difficulties and to face those problems that emerged from other sides and it originally wished to avoid. I mean that the dominant idea of the program is based on the over-taxation of the economy so that the government avoids the political cost that would derive from the reduction of expenses related to the public sector. That cost, however, and the resulting social discontent, are now evident on the part of those who see their disposable income being reduced due to taxes. As for the reforms, I do not feel that anything is changing in the way the Greek economy and society operate. Every reform depends not only on a simple passing of a law in the Parliament but also on a series of actions over time which will specify, clarify and adapt the reform to the realities that will ultimately impose it on the obstinate towards changes Greek society, overcoming the obstacles created by the various established interests. All this, however, cannot be implemented by the present government. It neither has the appropriate skills, nor believes in reforms. What is the future of a privatization, for example, when you mourn in the Parliament that you had to sign it, while at the same time you threaten the investor with destruction by stating that “the market will discredit” their investment?

On the revenues side, there is a view claiming that the targets are being achieved, even anti-developmentally, while another one focuses on the recessionary impact of over taxation. What is your assessment in view of the possible automatic activation of the financial “cutter”?

It is not always the case that a tax increase acts on the economy in a recessionary way. What matters is who is taxed and how you use tax revenues. In the present situation, however, it is clear that the current policy has indeed recessionary effects both in the short and in the long run: in the short run, because it afflicts the already overburdened citizens and uses the proceeds for non-productive expenses and, in the long run, because it distorts the operation of the economy by preventing and discouraging investment. I hope we will avoid the “cutter”, and it seems we probably will, because its activation would have extremely negative, leveling I would say, consequences both on social psychology and on any investment potential left to the economy.

The opposition presented during the Thessaloniki International Fair a tax reduction program with parallel targeted cost cutting. Do you think it is moving in the right direction? Are these proposals realistic?

Since you put it that way, I cannot say “No”. Indeed, it is “moving” in the right direction and the proposals put forward could, at first glance, be regarded as “realistic”. But they are not, for a very simple reason: because they are too few and too timid in relation to the problems the country is facing. In other words, it is not “realistic” for Mr. Mitsotakis to believe that a small reduction in property and company taxation could lead the country out of the crisis. These are just aspirins! What it is required is radical and brave breakthrough measures, which Mr. Mitsotakis cannot even insinuate, let alone announce. Because, on the one hand, he is a prisoner of the traditional populist mentality that never carries bad news to the citizens and, on the other hand, he belongs to a party that has been the mainstay of the patronage state and the economic parasitism and corruption, a party that, being in power in the period 2004-2009, carries the main responsibility for bringing us where we are now. Is it possible that this mechanism, which remains intact and its representatives were sitting in the front row when he announced his program in Thessaloniki, to let him proceed with radical reforms?

Do you agree with the view that, with some exaggeration, civil servants and pensioners are the ones that “elect” governments in Greece? How would you say that the social associations affect the mix of governance?

I do not think that the SYRIZA government has been elected by pensioners and civil servants, and no survey or poll points to something like that. The government was promoted to power by the entire old political establishment, that is, the Panhellenic Socialist Movement (PASOK) and the New Democracy (ND) parties, with their irresponsibility and inability to tell the truth to the Greek people about what is really happening. The people had learned a few things completely wrongly from these two parties, such as that you can live in perpetuity according to your wishes and not according to your abilities and your production. Seeing, then, that the two major political parties could no longer fulfill their promises, the Greek people thought, motivated by the sheer demagoguery which dominated the Greek society from 2010 onwards, that this failure is because these parties “were sold” to the foreigners. And therefore the people elected SYRIZA, wrongly considering that it was not part of the system, to bring back the good old days where one would get a pay rise regardless of the course of the economy, would easily get hired in the public sector, would start a business selling imported goods and would amortize the investment within the first year, the days that one would retire before churning out a single white hair and so on. The tragedy is that this belief that the “old world is possible”, continues to dominate the Greek people, who only now believe that SYRIZA was also sold to “foreign imposers”. It constitutes not only a dead-end politicking, but also an act of treason to the nation that the two political parties that were dominant during the post-1974 period still do not tell the truth to the people, do not admit that they were practicing demagogy and that they were lying, and at the same time do not explain to the citizens that they have to change their perception on things. Instead, they invest for their “return to power” in the irreversible deterioration of SYRIZA, due to the mismatch between the demagogic promises that were profusely given by SYRIZA and to the cruel reality.

How would you summarize the main interventions in need today by the Greek economy so that it finally undergoes a positive shock?

This is something I have said many times before, again and again. The interventions are simple but very difficult for the prevailing mentality. There is a need for structural adjustment of overdue loans with decisive moves, which even if they were not accepted by the prevailing demagoguery, they would enhance the competitiveness of the economy. Also, I would suggest a radical pension reform by streamlining and adjusting the pensions to the actual prior working contributions of every pensioner, a sweeping reform of the public sector with ostracism of any misspending or misappropriation of public funds, liberalization of product and labor markets and lowering of taxes to a level that we would be competitive not only in comparison with the Balkan countries but also with countries like Ireland. But the main policy target is one: to set unemployment as the number one problem of the Greek economy and to utilize all other issues as economic policy tools in an effort to combat it.

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