Rocking the Cradle of Democracy

After three days in Athens, including a first hand look at the street violence that once again rocked the cradle of democracy, a few immediate conclusions come to mind.

First, austerity is as hard as it sounds. Across the board, people here are feeling the effects of nearly three years of economic bad news. But unlike in the United States where hundreds of billions have been spent on stimulus, in Greece (as in the rest of Europe) the supply of money has been restricted. That makes it much harder to make hard choices. (As America’s leaders wrestle over our own long-term fiscal crisis, they should be thankful that things are not worse in the country than they might otherwise be.)

Second, Prime Minister Papandreou deserves enormous credit for courageously pushing through yet another round of reforms. His party’s majority is getting narrower by the day, as members of his party continue to drop out. But he seems committed to getting to “yes” with his supporters, even if that means risking a vote of confidence. Should that vote fail, default could occur, with potentially devastating consequences for not only Greece, but all of Europe and beyond.

Third, the greatest criticism that could be said for the Prime Minister is that he lacks the conviction of his courage. Each wave of reforms has been passed with a grudging claim that “the IMF made me do it.” He has been right to push back on false stereo-types about excessive pensions or pervasive corruption. He has had no help from opposition leaders, who have opposed him at every turn. And he has been right to point out that each Greek misstep has been seen elsewhere in Europe. But what he has done less of is to give Greeks an optimistic vision of the entrepreneurial society that is well within their grasp.

Greeks here are starting to see a little more clearly through the fading tear gas. They know that they have hard work ahead to rebuild their economy. They know that they will need the support of others. But what they need right now is a vision for how all of that comes together.

Papandreou will probably need to call early elections. That is the time for him to offer a vision forward.