Unite Europe Mrs. Merkel, Become a Part of History
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
The situation in Greece, mere weeks after the country’s recent national elections, is anything but settled. The country’s future remains mired in uncertainty due to the manoeuvres of the victorious but inexperienced, leftist “Syriza” party with respect to its dealings with its European partners. Greece is suffocating under a lack of liquidity resulting in the danger of a possible “financial accident” as its loan liabilities come due and the government appears increasingly unable to meet its obligations.
Angela Merkel, along with her extremely talkative and aggressive finance minister, Wolfgang Schaeuble, raised the tone of the debate from the get-go, pressing the newly elected Greek government to acquiesce to some highly threatening demands. Even before negotiations had begun, the European Central Bank tightened the funding spigot by cutting Greece off from its support mechanisms. The Greek side, apart from some very limited, periodic injections of liquidity for the country’s banks, has been basically left alone, forced to fend for itself, without any access to the financial markets and tormented by a lack of money.
To no one’s surprise, the nascent Greek government made many wrong moves at the outset due to its inexperience, causing the Germans a great deal of anguish and resulting in their adoption of a hard-line stance and their insistence that, without a positive assessment of the situation of the Greek economy, there would be no further funding for the suffering nation.
Regardless, these are pressing demands given that loan payment deadlines are looming and prolonged delays in the negotiations have spurred a domino effect, resulting in asphyxiation at all levels of public finances and forcing the government to scramble to round up every last available reserve. The delay in the collection of taxes that resulted from the elections, the paralysis that remains in the domain of business investment and the stagnation or halting of any potential or ongoing public works projects have contributed to choke off any glimmer of hope for growth in Greece’s economy.
This has left the country moving quickly towards an “accidental bankruptcy” (Graccident) while the Europeans play hardball, humiliating one of their partners and core member of the European Union. With finances quickly drying up and the government forced to turn to the country’s municipalities for emergency funding, the Europeans appear in no hurry to accept a viable agreement and release any urgently required sums. On the contrary, they seem to be rejoicing in their haste to denigrate the Greek Finance Minister, Yanis Varoufakis, and the entire staff of his negotiating team.
Well, Ms. Merkel, I have news for you. Should Greece fail to pay its lenders, the bomb that will burst will be one of megaton proportions. It won’t simply damage a Greek society that has been mired in the throes of the debt crisis since 2010, but will cause a break-up of the common European currency. As such, history will judge you harshly, sacking you and your associates with full responsibility for destroying the Eurozone experiment. It will be a disaster, not only for the EU, but for all the political and economic unions of the world. For, if this alliance is breakable, so is any other.
Ms. Merkel, you must be able to see that Greece can manage to get through these trying times with the injection of some added liquidity, perhaps through increased bond purchases by the ECB. The Greek Prime Minister, Alexis Tsipras, has already committed to a sound fiscal policy that requires a budgetary surplus, but of a maximum of 1.5% of GDP, because, as you have seen, the recipe of extreme austerity does not work during times of financial duress.
The left-wing Government is not unreasonable, contrary to what you may think. It will proceed with its agreed upon privatizations but it must also look to provide some relief to the weakest groups. This can easily happen if you allow for some leeway in order that it can be worked out.
Ms. Merkel, you should be aware that Greek society survived the crushing of its middle class as a result of years of austerity. Many jobless citizens can no longer pay their share of taxes as they are destitute while thousands of young graduates have been leaving the country in droves because they see no future here.
As such, it is your duty and obligation to not only to provide one more “tranche” to Greece, but to prepare, in tandem with the Greek government, a plan for sustainable economic development that should encompass any debt relief that that you and the IMF see fit. You must bring the country back to its rightful place and stop abusing it as Europe’s pariah.
It needs to regain the confidence of international investors rather than approach every new day like a terrified little child. It needs to stand up and plant itself firmly upon its feet and return to being the cradle of civilization, the human smile and the warm embrace of Europe.
Ms. Merkel, you have fate in your hands. Give the European Union its continuity and help it flourish and you will go down in history as a successor to Europe’s great statesmen. Opt for the opposite and history will judge you cruelly, condemning you for your choices.