There is a motto saying that “Caesar’s wife is not enough to be honest, she must also show it”. Perception nowadays is even equally important to actions, meaning that a negative perception for a positive action is almost equivalent to a negative action. It is widely known that Greece’s perception by the international investment community turned quite negative for several reasons over the past three years. I would suggest that Greece should adopt a more active stance towards improving international perception by quickly addressing two key issues, in my view, delivering and lack of communication.
Delivering, as well as implementing, is perceived by our international partners as an area where Greece has generally failed. Unfortunately, each of them is interpreting ‘delivery’ in the way he defines targets (fiscal targets, structural reforms, public sector downsizing, privatisations etc) and since Greece has not succeeded consistently in most of them, it is apparent that their perception is that Greece has completely failed in its adjustment program.
If there is a continuing delivery with small or big actions in most areas, implying that policies are adopted and then implemented, not only on major issues and/or measures, but repeatedly without long periods of stagnation, I think that the external perception would improve. If you are always delivering something on most areas, even with delays, they cannot argue that you are always postponing everything and just hope and wish for a future implementation. As Barroso stressed, “words are not enough; actions are more important”. The recent resolution of ATEbank issue, decided and implemented in one week, after >8 months of delaying or postponing any development, is an example, in my view, of ‘simple’ and decisive action. Furthermore, although ATEbank was not a big issue for the country, its resolution could pave the way for a restructuring of the domestic banking system and lead to substantive decisions on its recapitalisation.
On lack of communication, I would point out an example regarding budget execution: Over the past 3 months, revenues are falling short of targets by €1bn, primary expenditure is better than target by €1.5bn, while primary and budget deficit are significantly beating targets (by €2bn and €2.4bn respectively in H1’12). Nevertheless, media emphasize only the revenue shortfall and repeatedly downplay, if not ignore and mislead, expenditure and bottom-line performance. A similar picture is also evident on monthly general government (gg) figures, with media primarily focusing on state arrears to the private sector, while gg fiscal performance is totally disregarded. Since nobody is officially refuting this widely spread impression, the general perception is that budget execution is completely derailed, while Greek taxpayers believe that their sacrifices have already zero result. Improving confidence and trust is not always a matter of future anticipated performance, but also highlighting recent positive developments.
This is the crucial point for the future of Greece: Deliver!