WHAT IS HAPPENING WITH GREECE?

WHAT IS HAPPENING WITH GREECE?

Is Greece committing a suicide by risking ‘Grexit’ from European Union?

The whole world is ‘baffled’ watching a battle between a weak, barely surviving, Greek economy under the load of an unsustainable loan, on one side and the Euro Group which is experiencing its own crisis, on the other.

It is not very common, in its recent history that, Greece managed to generate such a conflict with its partners in Europe, consequently finding itself in full isolation over an issue of trying to end austerity terms and polices agreed and implemented  under contractual commitments of the previous government, which took place as a prerequisite to receive a major loan.  

It is the first time that a radical leftish government was elected, and stands for concepts that are in direct conflict with some European principles and practices, especially because this government was elected adhering to democratic processes.

Hence, it is to be expected that European Union has to deal with a new reality.

But let us now focus on the main points of the conflict.

Greece has received the highest ever loan in the European history under exceptionally beneficial terms which nevertheless have not helped Greece to exit financial crisis and lead to a development stage, on the contrary this approach generated 1.5 million unemployed (25%) and 2.5 million people living in poverty due to austerity measures enforced for five years, plus the additional burden of sustaining  an uncontrollable influx of illegal emigration arriving from Asia and Africa that cannot be absorbed by the Greek economy.

Small signs of improvement were shown after five years, at the end of 2014.

This minor improvement proved insufficient to release the steam of anger of the Greek society which reacted against such prolonged austerity period and became vulnerable to promises that SYRIZA,  a radical leftish opposition party, strongly advertised, during  parliamentary elections, which were craftily engineered,  under opportunistic circumstances, that significantly shortened the term  in power of the previous government.

The result was the creation a ‘peculiar’ coalition government between, SYRIZA and an ‘anti austerity measures’ right wind nationalistic party which is now trying to implement its promises to the Greek electorate.

This commitment is bringing both parties, the Greek Government and Euro Group to a conflict, leaving each one trapped to its own principles.

The Greek government is trapped with its commitment to execute promises that are violating contractual obligations already signed between a legally elected Greek government and the three parties Euro Group, IMF and Central European Bank.

The European Union is maintaining its stand for the principle of sustaiing credibility of agreements signed among countries and international institutions as well as for the provision of equal terms among members of the Euro group.

In addition to these fundamental principle points, both sides are trying to evaluate and compare a number of realistic terms and conditions to replace original parts of the initial memorandum. These terms expose in a very obvious way the existing conflicts in terms of political and financial policies. Such points include labor and trade union legislation, privatizations, restrictions in mass layoffs, all of which will influence private investments ect.

Points of common interest include the race against tax avoidance and tax evasion as well as the fight against corruption, but this cannot generate alternative and secure source of income to justify the cancellation of austerity measures and the introduction of most necessary reforms. 

In spite all, less or more, logical arguments, expressed from both sides, there is still a need for some additional realism, Europe should realize that the fundamental concept and principle for the creation of European Union includes sharing responsibilities for the implementation of plans regarding development strategies and planning. European Union cannot act as a separate entity not sharing any responsibility  when some of its plans fail, it cannot sit back washing its hands, hiding behind rules and conditions that prove to be damaging to a member state.

On the other hand no country can show disrespect to common rules and obligations every time there is shift of power after any election, hiding behind the aspirations of their public in the name of democracy because the same parliamentary party, with their populism, has raised their aspirations.

In addition, Greece belongs to other strongly related to EU  international organizations, such as NATO that participates in the planning of defense investments and expenditure that consumes a considerable percentage of the national income especially because most of this expenditure is spent on purchases from the financially stronger nations, that is Germany, France and USA. So, there is a latent customer- supplier relationship for more than one reasons that effects planning and relationships. So I personally believe that this factor will play a role to arrive at a compromising solution.

Nevertheless, I cannot predict to a better extend, the outcome of such compromise, except to express my feeling that political fanaticism in Greece is a real threat which, if combined with introversion and short site of other members of the Euro Group, can produce real disasters for both Greece and Europe.

On the other hand I truly believe this case will speed up a better approach to resolve conflicts within European Union towards a real political unification.