The dan­gers of man­ag­ing de­cline

Kathimerini English - - Front Page - BY NIKOS KONSTANDARAS

The anti-aus­ter­ity demon­stra­tion by some 100,000 peo­ple in Brussels yes­ter­day was fur­ther proof of a truth we dis­cov­ered at the start of the Greek cri­sis: It is very dif­fi­cult to man­age a so­ci­ety’s de­cline. Through­out Europe, a wave of rage and despair is ris­ing against aus­ter­ity and de­pri­va­tion; it par­a­lyzes gov­ern­ments, pro­vok­ing ten­sion be­tween coun­tries, be­tween groups of cit­i­zens, be­tween in­sti­tu­tions. There are no easy so­lu­tions that will re­duce debt while spurring growth. When the cri­sis broke out in the United States in 2008, Amer­ica and Bri­tain chose a dif­fer­ent route from Europe’s. Ig­nor­ing the cries of those who de­manded the im­me­di­ate re­duc­tion of debt, they both poured money into the mar- ket to support growth and jobs, to get past the acute part of the cri­sis. The United States and Bri­tain achieved greater growth and lower un­em­ploy­ment than the coun­tries of the eu­ro­zone. In Europe, the Euro­pean Cen­tral Bank has tried to support the econ­omy while hid­ing the fact, be­cause of the Ger­man dogma of strict aus­ter­ity and re­form. Ger­many says this for­mula works; the past few years have shown, how­ever, that harsh aus­ter­ity weak­ens the econ­omy and cit­i­zens, un­der­min­ing the nec­es­sary re­form ef­fort. Greece had nei­ther the au­ton­omy nor the cred­i­bil­ity to al­low it to keep bor­row­ing and print­ing money. In or­der to gain the support of its part­ners and cred­i­tors, it was forced to ap­ply aus­ter­ity at the same time that it at­tempted ma­jor changes to the econ­omy and pub­lic ad­min­is­tra­tion – changes that had an im­me­di­ate ef­fect on cit­i­zens’ lives and ex­pec­ta­tions. The de­pres­sion and long-term lack of liq­uid­ity in the mar­ket, high un­em­ploy­ment and min­i­mal in­vest­ment shook cit­i­zens’ faith and caused the po­lit­i­cal sys­tem’s frag­men­ta­tion. So as not to lose more votes, gov­ern­ments were wary about mak­ing the changes that cred­i­tors de­manded, while op­po­si­tion par­ties had to do no more than crit­i­cize the gov­ern­ments and their “for­eign” re­form pack­age and wait for votes to come their way. And so nei­ther those who voted for the changes nor cit­i­zens who may have ini­tially be­lieved in the need for re­form had con­fi­dence that the sacrifice was worth it. The de­layed re­cov­ery forced most peo­ple to rely on their own re­sources and sol­i­dar­ity, whereas each group that had the power took care of its own in­ter­ests. The pro­gram’s cred­i­bil­ity was shaken. Wher­ever coun­tries are forced to cut spend­ing and re­duce ben­e­fits, they will have to deal with cit­i­zens fight­ing to hold on to what they are los­ing, who have no faith in res­cue pack­ages. Greece’s ex­pe­ri­ence – with the mis­takes in the pro­gram, with dis­en­chanted cit­i­zens, with a po­lit­i­cal sys­tem stuck in past prac­tices – is the model of this. But it is no way out. The so­lu­tion de­pends on the Euro­pean Union de­cid­ing to pro­tect all that it has gained, to cre­ate a Europe-wide de­vel­op­ment plan, and, chiefly, to in­spire faith in the fu­ture.

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