ECB chief Mario Draghi’s last-minute euro rescue plan lies in shambles and Italian PM Mario Monti warns of the “psychological dissolution of Europe.” Now the Economist is reporting that Greece is far behind on its committments to international investors and may not implement all of the promised reforms for years, or even decades:
Greece has performed badly on many measures. On privatisation, the troika has set an ambitious goal of €50 billion in revenues. But this year’s target of €3 billion has been slashed to €300m. Only two disposals are likely to be completed by December: the state lottery and the former international broadcasting centre for the 2004 Athens Olympics, now a shopping mall. Almost 80 legislative and administrative measures will be needed before the next six deals can go ahead. . . .An overhaul of the tax administration, including closures and mergers of 200 regional tax offices, was due to be completed in June. Little progress has been made, and no new deadline has been set. Corruption among tax inspectors is rife, according to the state auditor. Only €10 billion of some €40 billion of outstanding taxes can be collected, a government adviser says. Officials are likely to keep reforms on a back burner, fearing that revenues would plunge if they attempt to transfer or sack taxmen. Several hundred big tax evaders have been identified, yet so far none has been convicted or imprisoned.
The government is quickly running out of money and won’t get any more unless the reforms are put in place on time, which is looking increasingly unlikely. Some predict that the state could go broke as early as September, with a possible Euro exit to follow shortly thereafter.Meanwhile, the list of countries facing imminent bankruptcy grows longer every month. If these countries follow Greece’s lead in their handling of European rescue packages, there is real reason to doubt whether the euro will last.