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Victoria Mindova

The inaction of the George Papandreou’s government and the lack of effective measures to cut the budget costs are in the base of Greece’s need of Memorandum 2, which brings even higher taxes and even more serious fiscal measures. This is the opinion of the lecturer of economics at the Aristotle University of Thessaloniki Dimitris Mardas, who spoke for GRReporter exclusively and did not hide his disappointment with the current governing of troubled Greece.

What are the specific measures that were not implemented on time and led to the fatal diversions and the need of Memorandum 2?

First, the cost of a bunch of public enterprises, public institutions and organizations had to be reduced significantly. Deliveries in health also could be cut seriously as well as the indiscriminate spending of funds from local government organizations. These are problems known since last year. There was no need to end up in this situation and the government to realize that it should start to discuss the implementation of such actions. These three sectors are the main culprits for state money wasting.

All assume, but you economists do say it specifically that the Greek government did not do what it had to do and now Greece would pay a dear price, right?

That is right. What was agreed was not done. We will not discuss now how real or feasible the things agreed were. In my opinion, of course, what was agreed in the Memorandum was exaggerated in some cases, especially regarding the problems that from the outset were known to be extremely difficult to solve. As a result, two major problems have occurred which led to the failure of the Memorandum. The first was the lack of agreement with the measures of many ministers in the cabinet. The second major problem was the lack of thorough knowledge of the subject of preoccupation of the heads of various institutions. In simple words, the ministers do not know well the scope of activities of their ministries.

Could you specify who those ministers are who have proved incompetent in the George Papandreou’s governmentf, according to you?

You see, there is no point of telling names, but I can tell you that there are capable people who understand both the development and implementation of strategies, but also know the various sectors very well. These people should be given advantage today, because otherwise we could not complete the reforms that the government plans. In addition, the rulers should continue their actions with a different, faster pace, so that targets can be met. We should forget all the negative examples that we have seen recently to be able to apply Memorandum 2 with the least negative effects. For example, the entire process on the utilization of state property could be applied in a much different and more effective way only if there was a different strategy by individual ministries.

We are talking about severe economic measures and the difficulties in the Greek economy. Today, more drastic actions are being prepared to cope with the budget deficit and the foreign debt, which are specified in the mid-term recovery plan. For example, the extra tax of a permanent nature by 2015. Do you think they could actually be implemented and if implemented, could they bring the expected results?

There is no recovery of state finances as we have touched neither the restructuring of public enterprises, nor the real reform of state administration or local organizations. They are not functioning effectively and are wasting public funds. The same is the situation with the uncontrolled spending of public hospitals. You see that the solutions based on the new higher taxes are extra firefighting measures. In other words, the absence of measures to reduce spending in the budget leads to the inevitable increase in revenue. Those are actions that the government can not avoid. It can not cope and reduce the costs, there is no economic growth yet, and it finally resorted to new measures to increase revenues.

Given this uncertainty in general and the measures of dubious outcome, do you think there is a danger that Greece would not receive the fifth tranche of the financial support?

I think that issue has been solved and Greece will receive the fifth installment of the Memorandum. We could have not achieved the objectives set in the contract, but the second Memorandum shall enter into force and it includes the objectives that were not met with the first one. Once it was established 12 billion euros will be paid. They could not but pay us the fifth tranche as we agreed for the second contract for support.