NEW IMPETUS appears to have been given to DIKO chief’s Nicolas Papadopoulos’ drive to build a political front aiming to secure ‘improvements’ to the Troika’s memorandum of understanding (MoU), after last week’s meeting with EDEK leader Yiannakis Omirou.
Omirou welcomed the initiative and the two leaders agreed to set up working groups that would draft proposals for the re-negotiation of parts of the MoU with the Troika.
A few weeks earlier, Papadopoulos met the AKEL leader Andros Kyprianou for the same purpose and also secured a positive response. After all, the populist communists have been trying to make political capital out of their opposition to the memorandum from day one on the absurd grounds that austerity measures did not work. It was agreed the two parties would engage in a dialogue to which AKEL would bring its own ‘improvement’ proposals, but nothing has been heard since.
Perhaps the AKEL-DIKO dialogue failed to agree on the ‘improvement’ proposals and forced Papadopoulos to turn to EDEK. Another possibility is that the DIKO boss would at some point try to forge a front of all three parties and act as its leader. This would not only help Papadopoulos’ presidential ambitions, but also give him a new cause to champion after his vociferous, ultra-hard line on the Cyprus problem proved such a flop, as the European election results showed.
Funnily, the hollow rhetoric the parties have been using about the memorandum is not dissimilar to what they routinely use for the Cyprus problem. The government was not pursuing an ‘assertive’ policy in its dealings with the Troika, while provisions of the memorandum were ‘completely wrong and had to change’. This is like the empty promise that through an ‘assertive’ policy and the ‘repositioning’ of the Cyprus problem we would have a fair and viable settlement in no time.
And now DIKO, EDEK and AKEL are idly claiming that by changing some provisions of the memorandum the economy would be put on the road to recovery and lives would start to improve. Papadopoulos has even been resorting to AKEL’s disingenuous argument that austerity measures did not work, even though his party had no such qualms when it was voting them through the legislature. On Wednesday he said that if the government did not try to change provisions of the MoU it should not expect the parties to back policies that ‘failed to yield the desired results’.
But what was the purpose of the MoU? It was certainly not to help end the recession as the parties have been claiming. The MoU’s primary concern was to put the economy on a sound basis by rationalising public finances and restructuring the banking sector, so that the state would be in a position to repay the €10 billion it received in financial assistance from international lenders in order to avoid bankruptcy. The Troika did not come to Cyprus to fund development and help us get out of the recession, as AKEL, EDEK and DIKO have misleadingly been claiming.
Papadopoulos, as chairman of the House finance committee, always knew this and often took a responsible public stand when his new political allies opposed memorandum bills. But now he has decided to embrace their irresponsible, anti-memorandum demagoguery as he has not accrued any political advantage from his firebrand Cyprus problem rhetoric. He wants to re-negotiate the provisions of the MoU that he and his party had approved a few months ago, because the economy was still in recession. He knows very well that renegotiating bits of the memorandum would not kick-start the economy when the issue of non-performing loans, currently at 50 per cent, remains unresolved and banks are illiquid.
The truth is that the memorandum is the strong medicine the Cyprus economy desperately needed after years of reckless mismanagement by the political parties and unions. It has forced the politicians to implement measures they would not have dared touch in normal conditions. Thanks to the memorandum, profligate state spending has been brought under control, the dysfunctional public service is being restructured, welfare policy has been rationalised, local government will be downsized, the state education system will be revamped and the national health scheme will be introduced at last.
This is happening because the Anastasiades government has been working constructively with the Troika to clean up the mess that was created by decades of reckless spending and mismanagement by the politicians. It is thanks to this co-operation that the government has returned to the markets and funds for development are gradually being made available by the EU. Do Papadopoulos and his allies want to ruin all this progress made by pushing their unjustified demand for a renegotiation of the MoU?
