In the end, the government was left with no choice but to withdraw its bill on state guarantees on bank loans because it had been amended beyond recognition by the opposition parties, playing their favourite game of mindless populism, regardless of its consequences. It was these same political parties that rejected the first bailout proposal by the Eurogroup in 2013 which led to the much worse second proposal, so they do not exactly have the credentials for making decisions in times of economic crisis.
What is infuriating is the complete absence of any sense of responsibility or awareness of the precarious situations so many businesses find themselves in. Opposition parties are happy to use the crisis to win a few more votes, pandering to the public by making amendments to the bill that supposedly would help the ‘less well-off’ businesses, but which are unconstitutional and, according to the government, incompatible with EU directives. They would rather engage in this childish theatre that leads nowhere than act constructively.
For almost two months the government has been making concessions to the opposition parties, changing the amounts that would be guaranteed, agreeing to direct grants, setting restrictions on the loans that would be allocated to the bigger businesses, to secure the votes needed to pass the bill through parliament. The concessions were to no avail, the parties viewing the government’s stance as a sign of weakness and licence to make more amendments to the bill. The consensus the government was looking for was a chimera.
No consensus can be built with parties like Akel and Diko, whose economic thinking is based on a single premise – spend as much money as possible even if you cannot afford it. The fact that these parties wanted the state rather than the banks to lend the €2 billion initially proposed by the government was so that nobody would have to pay the loans back. Because the government did not agree, the parties demanded that the state should guarantee loans of only up to €1 billion. Their concern about helping businesses was put aside in order to cause difficulties for the government.
Unfortunately, this is how the opposition parties have always behaved. We would have hoped that in a time of crisis like this they would have been able to act responsibly, supporting the government’s bill that was trying to offer support to businesses. Finance Minister Constantinos Petrides said new plans would be announced by next week but unless the government can bypass the legislature there is no guarantee these would be approved by the opposition parties.