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Greek lessons

29 December 2011 By Hugo Dixon

Greece needs to welcome foreign experts with open arms. Athens is incapable of solving its problems on its own. The state apparatus isn’t functioning. What’s needed is outside help to rebuild it. First, though, Greeks need to stop viewing foreigners as invaders and see them as potential saviours.

Such a change in mindset will be hard to engineer, given that it will seem like a loss of sovereignty. But consider the alternatives. Greece has lost credibility with its creditors. It is only being kept afloat because the other Europeans haven’t yet figured out how to pull the plug without themselves going down the drain as well. But Germany et al may finally find a way of minimising contagion, in which case Greece will have its funding cut off and will then be on a fast track to exiting the euro.

Even if the rest of Europe keeps Greece on a drip-feed, the country will lurch from one half-implemented austerity plan to another. Part of the failure is down to inadequate political will; but part is also down to the failure of the machinery of government. The courts, the tax collection service and the civil service just aren’t working.

The better way forward is to think of Greece as having suffered the economic equivalent of a war or natural disaster and appeal for experts to reconstruct it. Economists, lawyers, bankers and administrators are needed – not just in their dozens but in their hundreds. Ideally, many would speak Greek, which points to recruiting some from the country’s large and talented diaspora.

If the Greeks could bring themselves to ask for help rather than accept it grudgingly, that might in turn produce a change of attitude on the part of their creditors. The rest of Europe might start believing that Greece isn’t a lost cause after all. There might even be a way of tilting the programme away from short-term austerity and towards long-term structural reform. That, in turn, would make the whole recovery plan much more achievable.


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