Greece: From Exit to Recovery?

Notes

Notes Introduction 1. Several recent studies, including one by McKinsey (2012a), already provide ample suggestions both for horizontal policies and for sector-specific policies. Furthermore, the numerous issues that need to be included in a comprehensive growth strategy for Greece are treated, among others, in studies by McKinsey (2012a, 2013) and the Boston Consulting Group (2013). They stress the contribution of the tourism and shipping sectors to the Greek economy, sectors often considered to be key parts of a strategy to achieve the recovery of the country. Chapter 1 1. From the confidential information, only those pieces that can also be supported by publicly available information have been included in this text. The source for the enacted laws is the Official Government Gazette, Issue A, 1990, no.: 101, 124, 127, 138, 142, 143, 147, 157, 163, 178, 186; 1991, no.: 12, 19, 41, 50, 96, 114, 123, 132, 138, 146, 149, 167, 184, 192, 206; 1992, no.: 34, 42, 94, 104, 113, 123, 129, 130, 138, 154, 158, 159, 165, 180, 181; and 1993, no.: 15, 24, 48, 57, 62, 88, 109, 118, 127. All are available at www.et.gr. 2. How did public opinion in Greece view the European future of the country and the necessary reforms that would ensure its success? Polls and the Eurobarometer (EC 1992), even ahead of the ratification of the Maastricht Treaty, reveal for Greece a very high trust in the European institutions and a very low trust in the domestic political establishment when compared to the beliefs of the citizens of other European countries. One also has to keep in mind that in 1990 the government was elected on the basis of rhetoric that explicitly stated that structural reforms and fiscal consolidation were inevitable; that in 1996 the electorate voted 139 05-2577-0 notes.indd 139 4/30/14 1:52 PM 140 Notes to Pages 7–12 in a socialist government that appeared to have a credible chance of addressing the country’s shortcomings, without the risks of a head-on confrontation with powerful special interest groups; and that in 2004 the electorate supported a government that had announced its intention to reform public administration and consolidate public finances. Thus all the available evidence appears to support the assertion that the electorate for decades had supported those candidates who, at each election, appeared more likely to secure the European future of the country and to address its perceived shortcomings, while at the same time looking to the European institutions as guarantors that would ultimately force the Greek political establishment to break with its previous habits of the past. See Mavris (2004) for a more detailed analysis. 3. Minutes from the 1992 discussion in the Greek parliament preceding the ratification of the Maastricht Treaty are available from the Hellenic Parliament Archives. 4. During this time the central government data in the budget were more reliable than those from general government entities, and therefore the budget did not always reflect the full extent of general government indebtedness. Also, after 1993 the GDP of the country was recalculated according to ESA95 (the European system of national and regional accounts) and found to be higher. Thus the data currently presented in the EC tables differs from the data included in the government’s budgets at the time, as the deficits of the general government entities are added to the numbers and as the numerator of the deficit-to-GDP ratio has increased. See the annual budgets of the government for 1990 through1995, available in the library of the Bank of Greece and the Greek parliament. The increase in GDP implies that the deficit and debt ratios to GDP are now calculated to be smaller than shown in the tables of the government budgets for the years 1990–94. 5. According to the government’s budget for the year 1994—submitted in November 1993 by the successor government, which had no motive to present facts that would favor its predecessor—the loans of “economic rationalization” provided during the previous decade and paid off during the 1991–92 period had added 1.897 billion drachmas to the public debt, or 11.2 percent of 1993 GDP (“Introduction to the 1994 Budget as Submitted to the Parliament,” p. 127). In addition, the accumulated losses of the Bank of Greece (mainly from interventions to stabilize the drachma during the previous decade) came to 2.973 billion drachmas (17.7 percent of GDP), and these also were added to...