The end of 2014 has not been very profitable for Greece. In fact, the "austerity" policy that has been in place for half a decade has not delivered the expected results. The weak coalition under the guidance of Premier Samaras has struggled to present the Greek economy in a better light. Samaras has expended immense efforts in convincing the Troika that the economic trends in Greece should be rewarded by the alleviation of austerity measures.
The Troika comprises the European Central Bank, the European Commission and the International Monetary Fund - basically three faceless, anonymous institutions that supervise Greek's daily lives by taking into consideration only economic data. Greeks have been hurt by years of severe austerity measures, and decreasing or disappearing pensions and social support mechanisms. The state is dysfunctional, plagued by a cumbersome bureaucracy, and most of the professional sectors are severely restricted. State-owned companies are numerous and mostly uncompetitive. The austerity policy went hand-in-hand with a comprehensive privatization program. But although austerity measures have been applied thoroughly, not even one-fifth of the planned privatization was carried out, mainly due to the staunch opposition of the political parties and the bureaucratic establishment.
Greece is burdened with an immense debt that goes as high as 177 percent of its gross national product. The bailing-out process has left the country without any chance of acquiring new loans from the international financial system. It seems that the political class is not ready to reform public spending or the privatization program. Therefore, the Greek economy does not deliver, at least not sufficiently for the Troika program objectives.
Premier Samaras tried to break this vicious cycle by trying not to put stress on privatization, but rather on the existing results and the good intentions of the Troika. The Troika is made up of anonymous institutions, as stated above, and has no "good intentions." That was a mistake. A political decision could have been taken by the EU countries, at last by the biggest EU countries in order to cut off some Greek debt (240 billion Euros), and give some breathing space to the Greeks. This did not happen, and Samaras' attempts have failed badly. The latter thought that using the "anticipated elections" trump would win him some more time and alleviation of the austerity measures.
Not only no concession has been made to the Greek government by the Troika, but the anticipated presidential elections in the parliament badly backfired. The Greek constitution foresees general elections within a month, if no President is elected by the Parliament. This is going to happen by the end of January. All opinion polls indicate that the United Left Syriza, under the guidance of Alexis Tsipras, a young, charismatic and radical figure, will win the elections.
The IMF has stopped all payments to Greece, the stock exchange has virtually collapsed, and the borrowing interest rates of Greece have attained almost ten percent on international financial markets. Not only has the IMF refused to take into consideration the very delicate political balances before the elections by blasting any chance of the coalition to win, but it also does not have the flexibility to consider social and political factors when it comes to reducing Greek debt.
The new situation in Greece is a blatant example of the inability of the Greek political elite to tackle the serious reforms the country needs; but this is also a concerning demonstration of the total inability of the EU to come up with any political solutions to deep political crises.