Greece and the wider world/October 2018

Posted by Antonis D. Papagiannidis 01/10/2018 0 Comment(s) Economia Blog,

The interface of Greece - of the Greek political system, but most importantly of Greek public opinion - with the wider world/the world out there gets once more laden with problems. Two ever-recurring friction areas come to the fore: the “name issue” that Greece has with neighboring FYRoM and the next steps in the country’s post-Adjustment Programme effort to get back to something close to “normal”.


To start from the second issue, which has less to do with “High politics” but can cause important disruption: Greece looks set to establish a draft 2019 Budget (to be submitted to the “European Semester” EU procedure) that would adhere to the over-arching agreement for 3.5% of GDP in primary surplus BUT without factoring in the more specific agreement with creditors over pension cuts of an order of 1% of GDP. How might such magic come to pass? By not integrating in the 2019 Budget (equally agreed-upon) “counter-measures” of a social character and of equal magnitude. Or, by putting forward a draft Budget with two options. Will such a deal be agreed upon by Greece’s creditors? Up to now, we have rather mixed signals: “the markets” (at least Moody’s) are getting nervous at the sight of Greece trying to back-track on structural reforms, or at least of reforms tagged as structural in nature, even if they are neutral in fiscal terms; “Brussels”, in the person of Valdis Dobrovskis or Pierre Moscovici, are issuing warnings. What will be the end result?


As to the regional geopolitical equilibrium that is supposed to be buttressed by Greece joining in to “The West” and accept the FYRoM, henceforth to be renamed “Northern Macedonia” , to the Euro-Atlantic securising clubs: NATO and - later on, let’s not get overly enthusiastic - the EU. With the double promise of stability and some sort of economic growth at the end of the trek. The Sunday referendum at FYRoM-to-be-renamed-Northern Macedonia was not successful at getting the vote out, with abstention over 60% hollowing political support (even if more than 90% of “Yes” was the technical outcome). This may well end in bringing the Greek government on even less secure ground when the matter comes to the Greek Parliament.


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