Sunday 6 February 2011

Why Prime Minister Papandreou should not travel to Egypt

One of the most bizarre and last-minute ideas recently raised by Greece’s Prime Minister was to make a trip to Egypt to discuss with embattled President Hosni Mubarak the EU’s and Greece’s ideas for ending the conflict. This issue was apparently raised at Mr. Papandreou’s initiative during the EU summit on Friday, and according to various Greek evening news programmes was cancelled by Saturday, some 24 hours later.

As with other spur-of-the-moment initiatives proposed by the Prime Minister, such as Greece’s plan for Balkan EU entry by 2014, or the Mediterranean Climate Change Initiative, this plan is an example of well-meaning hubris which, though born perhaps of good intentions, does little to encourage our opinion that the country is effectively lead.

Greece is undergoing the most far-reaching and wrenching change to public administration and economic life since the German occupation in 1941. The threat of a default has not subsided, and there continues to be no realistic plan for repaying EUR 330 bln in central government debt, let alone preparing Greece for the wrenching economic  and social changes we can expect in this coming decade, let alone in this coming year.

At this time, the government’s efforts should be fully concentrated on making this transition work, namely:

·         Implementing the Memorandum to the letter and spirit of the agreement. Urgent solutions are needed to liberalise professions and deregulate the economy, particularly public transport which recently added over EUR 12 bln in debt to the central government. Much more progress is needed in meeting income targets and achieving real structural change.

·         Dealing with the short-term economic and social crisis which the Memorandum (and more properly speaking, Greek government policies over generations) has caused by continuing to cut waste, refocus government efforts, and deal with issues such as the 13% unemployment rate and the high rate of business closure.

·         Implementing critical reforms which have not been mentioned in the Memorandum, namely streamlining and eliminating bureaucracy; developing a real investment attraction programme; reforming the judiciary; qualitative reform of education and public health, and others.

·         Determining an economic policy which responds to the paradigm shifts in competitiveness which arise from Asian, Mediterranean and Balkan competitors. This must include a plan for employment and human capital productivity.

Moreover, it is difficult to see what role Greece can play in Egypt. It is not a major trading partner (like France or Germany), nor a major strategic supporter, like the United States. Neither Greece nor Mr. Papandreou figure largely in President Mubarak’s calculations of his own survival, nor are they a factor in the secular opposition or in the Muslim Brotherhood. Other far more qualified interlocutors, such as Tayip Erdogan, the Prime Minister of Turkey or Amr Moussa, the Secretary General of the Arab League, are sitting this one out (or are visiting the demonstrators). The European Union has a Vice President for External Relations, Lady Catherine Ashton, or it can send Herman Van Rompuy, President of the European Council. What makes Mr. Papandreou think his own credentials carry more weight, or provide greater access, than any of these other figures?

Greece needs a turn-around plan to extricate it from the current crisis and prepare its citizens for the future. Travelling to Egypt does nothing to support this. Mr. Papandreou should stay home and implement the tasks for which he has been elected, and to which he has agreed since coming into office.

(c) Philip Ammerman
Navigator Consulting Group 

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