Task Force Greece: A "Quantum Leap" or A Last Ditch Effort?

Monday, December 05, 2011

By David Bastian

In an effort to bring additional technical expertise and provide operational guidance for Greece’s structural reform efforts, the European Commission established and dispatched a new task force known as “Task Force Greece.” EU Commissioner for Monetary Affairs, Olli Rehn called the creation of the Task Force a “quantum leap” in Europe’s effort to provide technical and financial support to a member state. Led by the former Vice President of the European Bank for Reconstruction and Development, Horst Reichenbach, the task force is dually organized with a team based out of Brussels and on-the-ground experts in Athens. The Task Force will work in conjunction with Greek policy makers, regulatory organizations and private sector institutions with the primary objective of effectuating a more efficient absorption of EU-provided funds intended to stimulate economic growth and job creation.

The primary objective of the Task Force will be to aid Greek authorities in the implementation process of austerity measures imposed by the so-called “Troika” (the IMF, the European Central Bank, and the European Commission). However the implementation of austerity measures must be matched by the regeneration of economic growth. Therefore the Task Force will be working side by side with Greek authorities to identify policies that will stimulate growth in a country that has experienced three consecutive years of economic recession.

Over the coming months, the Task Force will offer ideas and strategies on a plethora of issues ranging from tax and healthcare reform, to the creation of a safe and profitable environment for investments and other matters of public interest. The Task Force’s technical support will cover virtually all aspects of the Greek political economy in an effort to achieve sustainable structural reforms, such as electronic procurement systems for public hospitals, e-services for the public administration sector, modernization of the national tax administration, as well as training for the measures to be implemented. 

However, in addition to the “great challengei” presented by the Task Force’s official mandate, difficulties are compounded by a high level of public discontent within the Greek population. The austerity measures along with the presence of various international authorities such as the Troika have been met with strong resistance from trade unions and special interest groups. As tens of thousands of government jobs are subject to cuts, in order to meet the Troika’s demands for action by the Greek government before additional financial assistance can be disbursed, the country’s civil servants are in uproar. Daily strikes by Greece’s government employees have caused major disruptions to essential public services such as waste management and public transportation among others. To analogize Homer’s tale of Scylla and Charybdis, the Task Force in cooperation with the state must navigate between satisfying its international creditors by drastically cutting government spending, while simultaneously avoiding an environment that is becoming increasingly conducive to social upheaval. The best way to alleviate internal criticism and public discontent will be to create a favorable environment for job creation and investment in the real economy. This is the core objective of the Task Force’s mission.        

A Greek default on its sovereign debt could have grave and far-reaching consequences for the European as well as the global economy. The most immediate risk concerns the future composition of the Euro Zone which faces the prospect of disintegration if the Greek financial crisis is not resolved in a timely and comprehensive manner. The recent replacement of former Prime Minister Georgios Papandreou with Lucas Papademos has added yet another element of uncertainty to Europe’s effort to keep Greece solvent. Thus, the arrival of Task Force Greece could turn out to be a final throw of the dice for Greece and possibly the Euro currency.

iThis phrase was used by Dr. Jens Bastian, a member of Task Force Greece during a personal interview on October 10th 2011, describing the group’s operational mandate.


References

  1. EUROPA – Press Releases. (2011). Questions and Answers on the Task Force for Greece [Press Release]. Retrieved from http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/599&type=HTML
  2. Taylor, Simon. "Commission Sets up Taskforce to Oversee Greek Reforms." EuropeanVoice.com. 20 July 2011. Web. 07 Oct. 2011. <http://www.europeanvoice.com/article/2011/july/commission-sets-up-taskforce-to-oversee-greek-reforms-/71712.aspx>.
  3. Williams, Anthony. "Horst Reichenbach Named Head of European Commission Task Force for Greece." European Bank for Reconstruction and Development - News Stories. 20 July 2011. Web. 07 Oct. 2011. <http://www.ebrd.com/pages/news/press/2011/110720a.shtml>.