A nation’s remarkable recovery of trust

Ten years ago, Greece’s false claims about its debt sent both it and Europe into an economic spiral. Now its steady return to credibility shows how countries can restore trust.

Reuters
People buy seafood at the Athens' main fish market.

Take it from a country that knows – it is possible to restore lost trust.

On Dec. 9, a day designated as International Anti-Corruption Day, a new Greek prime minister, Kyriakos Mitsotakis, hailed his country’s latest step in battling corruption. For the first time, Greece will have a single, independent body to probe government wrongdoing. The so-called Transparency Authority, Mr. Mitsotakis said, will also help restore the qualities needed in public life to regain Greece’s credibility.

The new graft-busting agency is one more milestone in Greece’s odyssey to redeem its reputation. A decade ago, the government admitted it had been lying about the size of the national debt. Instead of being 3.7% of gross domestic product, it was more than 15%. The falsification of official data shook financial markets and almost broke up the European Union’s single-currency zone.

Europe’s economy spiraled into recession. Its leaders then worked hard to instill a culture of integrity in Greece along with providing it with massive bailouts – the largest ever to a country on the brink of bankruptcy.

That work is steadily paying off. Almost every political party now supports open and rational economic policies, such as creation of the new anti-corruption agency. The government is running a budget surplus that is verifiable. This year, the Athens stock exchange could be the world’s best performer. Greece is again borrowing from financial markets on very favorable terms. And its economic growth could reach 3% next year.

To be sure, unemployment, tax evasion, and the Greek debt remain high. The policies of forced austerity were necessary but they took a heavy toll in increased poverty. Nearly 40% of bank loans are considered “nonperforming.” And about a quarter of Greeks say corruption is still the most significant issue.

Yet Greece’s democracy has proved resilient. “The real efforts and the real courage were shown by the people of Greece,” said former European Commission President Jean-Claude Juncker last June. “Greece is in its rightful place at the beating heart of Europe and of the euro.”

Greece also taught the EU something about integrity. For years, said Mr. Juncker, its member states had resisted tighter rules on verifying their official financial statistics. “That was a major mistake,” he said. “Would we have done the right thing, we would never have experienced the Greek crisis as we did.”

As it is, the EU is celebrating the “Greek miracle” of recovery – in both its economy and its credibility. As Europe’s lost sheep, Greece is now found and flourishing in a new spirit of accountability and transparency.

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