Greece-EU negotiations: No more dreaming, just hard realism
- By Sumantra Maitra
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E-mail China.org.cn, March 2, 2015
This raised the population to fever pitch against the "European authorities." Any kind of hysteria is a hindrance to a realistic bargaining prowess, and the dreamlike journey of politicking gives way to the reality of governance.
The second fault of the new Syriza government coalition was to develop a big head immediately after the election victory. The markets were already jittery in the immediate aftermath, and new Prime Minister Alexis Tsipras and his finance minister did nothing to soothe the nerves of the investors.
Rather than adopting a collaborative stance, Varoufakis stormed across Continental Europe lecturing about austerity as a failed strategy and insisting Greece would lead the way to a "new dawn," ironically similar to the name of a neo-fascist party in Greece. He was regarded as brash and abrasive in the creditor countries led by Germany, Netherlands and the Scandinavian nations.
The trust that is generally needed in this kind of situations was lost immediately. The volatile markets in Greece saw a sharp credit outflow, with billions of dollars withdrawn, most importantly immediately after the nationalization and rehiring of laid off workers. The creditor countries saw this as a betrayal to the pledge of long-term structural reform.
Tsipras also miscalculated. Inexperienced, he believed the European south would rally under his banner. Countries like Spain and Portugal, stifled by their own austerity measures, would support Greece in confronting German draconian fiscal discipline. But it didn't happen and all he managed to do was to strengthen the already preponderant anti-Euro wind blowing across the continent.
The population of the debtor countries would then learn from the example of Greece, and would start electing Eurosceptic parties, which might lead to a rebellion against the creditor nations, thereby breaking up the entire European Union. That is exactly why countries with lower GDP than Greece, such as Estonia and Slovakia also opposed Greek plans.
So, the Greeks must start being more realistic about their recovery program and the needed deep structural reforms, including labor laws and taxation.
The author is a columnist with China.org.cn. For more information please visit:http://www.china.org.cn/opinion/SumantraMaitra.htm
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