by Nikos Xydakis

A sense of gloom has descended upon us following the brief hiatus of the festive season, as retail markets contract and households feel increasingly constrained and frightened. This gloom, a prevailing and deep feeling of despondency, has now become a structural characteristic of society that first became apparent back in the summer of 2007.
The financial crisis, pressure from markets and threats of bankruptcy may well transform this despondency into defeatism. And defeatism leads to paralysis. The government, feeling the noose of the markets tightening around its neck and cracking under the pressure from its European partners, is incapable of producing any policy beyond the fiscal discipline measures that are dictated to it. And while trimming the deficit and reducing the debt are clearly issues of crucial importance, they are not the only ones.
The government should first of all be making every effort to fully understand public sentiment, make an accurate assessment of the present reality, safeguard social cohesion and ensure a just and viable plan for growth. Does the government have what it takes to do this?
Its stability plan is all about cutting costs and raising taxes, placating Brussels and appeasing the markets to improve its borrowing prospects. Where, though, is the plan for growth? Where is the light at the end of the tunnel? What does the average person have to expect after three more years of sacrifice? How will small-business owners, 50-year-olds who live in fear of unemployment and farmers who have been left to their own devices pick themselves up? Where will the hundreds of students currently at universities offering an education of questionable quality come into the productive equation? What is the strategy for tourism, agriculture, small and medium-sized enterprises and innovation?
Nothing is said about any of this. Nothing specific. All we get instead are vague announcements about green development on the one hand and, on the other, that all-time favorite, the diversion of the Acheloos River.

The G20 Summit

The outcome of the G20 summit in London is looking rather bleak, as its objective is quite unattainable: The international economic slowdown requires a concerted effort that is much easier said than done. The fact that everyone is voicing strong opposition to protectionism means that the threat is probably more real than officials would like to admit.
The crisis threatens, to a greater or lesser degree, every economy in the world and in this sense it is a common enemy. On the other hand, however, it has also highlighted the differences between the G20 countries.
The London summit is, in fact, a first informal and fundamental effort at international governance and this group was chosen by Washington because it suited it best. The G7 group had too much of a Cold War balance of power and the addition of Russia, to make it G8, did little to redress this. Without the participation of the new emerging economic powerhouses (first of all China and to a lesser extent India and Brazil), any synchronized response to the crisis on a global level will be ineffective.
US President Barack Obama is looking to rally the West so that, through it, America can preserve its hegemony with greater consensus and keep a lower profile. His policy, however, is being undermined by the Franco-German axis.
Paris and Berlin demand that stringent supervisory measures are imposed on the market. Washington and London want to see more rescue packages to boost the international economy. These are two very different issues rather than different positions and both, in fact, are necessary.
The reason why the G20 summit may come up empty is that the one side does not really want financial markets to be monitored while the other, and Germany especially, does not want to loosen its purse strings. So, not only is there no rallying of the West against the “others,” but the internal rift is actually stealing the show.