Grexit or Graccident, Charybdis or Scylla?

Published 01.06.2015 23:01
Updated 02.06.2015 00:25

Since 2010, Greece has been caught in a terrible economic turmoil. The European Union institutions and countries, alarmed by what was happening in the USA, thought it would be a good idea to first envenom the situation by insisting upon the "seriousness" of the Greek economic situation, then establishing a wide system of securing the Greek banking system, essentially by injecting enormous sums of money in the Greek banking system.

The biasness of the Greek National accounts having been solved a dire and Draconian austerity and reform program has been imposed on Greece. Not only the program has not been properly implemented as regards the transparency and privatization measures, but its effects have been visible only on the shrinkage of the economy and of low-income pensions. The unemployment has been stuck to a terrible 25 percent and the economic growth is still absent. The debt/GDP ratio has gone from 110 percent up to 170 percent and there is no visible perspective for Greece to repay its debts within the given time frame.

Slowly (very slowly), the European Institutions (mainly the European Central Bank and the IMF) have come to the understanding that the social repercussions of the austerity policy have gone much beyond their previsions, and definitely much beyond any acceptability. The austerity and reform policy did not deliver, even if the reforms are carried out diligently, the recovery of the economy will take much longer and the restitutions of all debts incurred remains an even less obvious perspective.Syriza came to the power at that juncture, with some good ideas and mainly a slogan "enough is enough." The trouble is that financial capital does not look like the Persian army and Tsipras is not Leonidas with a bunch of irreproachable Spartan warriors. Despite his courage and vision, there are extremely severe limits to what he has been up to impose upon Greece donors.

Very much when the first Greek tragedy of National accounts was discovered back in 2010, the EU leaders have taken the same totally irrational stance. At first, there was a total panic regarding the immensity of the Greek black hole, which has been managed rather easily by the "Troika." The same stance prevailed when Syriza came to power and declared its intention to alter the payment schedule and to restructure the debt. This has caused another general panic and the idea was to "punish" the new and very unorthodox Greek government.

Both Tsipras and Varoufakis have been duly admonished in various forums and meetings, their wish to restructure the debt and to restructure essentially the reimbursement system have been bluntly rejected. The Greek government had to immensely dilute its initial stance, however a slight opening was made available for Tsipras on Feb. 20, the debt crisis was supposedly postponed, for at least four months. Today we are in a situation where nothing has been solved and more seriously, no immediate solution is in sight.

The only real achievement of the Syriza government has been to rename the "Troika" as "European institutions." A very unhealthy situation prevails where both parties see the exit of Greece from the eurozone as inevitable but do not wish to bear the responsibility, rejecting the blame to the other side. Germany, which leads the management of Greek crisis, is extremely unwilling to back down because loosening the "bailout" terms for Greece will only encourage populist parties in Spain (Podemos), Portugal and perhaps Ireland. Tsipras and his colleagues try to meet the most pressing issues, surrendering to most demands of the "European institutions." This is a very hazardous way to offer Greece a choice between Charybdis and Scylla and can undermine once and for all the "irreversibility" of the European integration.

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