The Guardian view on Greece and the eurozone: time for realism and compromise
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Version 0 of 1. Negotiating with Greece’s lenders was bound to be a struggle for Alexis Tsipras’s government. The radical left prime minister hoped not only to pull Greece out of austerity programmes that have caused so much social suffering but also to put the whole of Europe on to a new economic course. That was always an ambitious project, and now it’s unravelling fast. The inexperience of Greece’s new leadership has certainly played a role. But the odds were difficult from the start: Greece’s European partners have been adamant, over the past two months, that there was no way that the current bailout programme, negotiated back in 2012, could be amended – at least not without clear proof that structural reforms would be forthcoming. When Greece obtained a reprieve on 20 Febuary the conditions attached were very clear: any extra spending on pensions or salaries would have to be met with equivalent cuts. Put bluntly, there was going to be no free lunch for Greece, whatever its woes, and Germany’s finance minister, Wolfgang Schäuble, who carries much weight on such issues, has made sure fiscal orthodoxy would prevail. This is the difficult equation Mr Tsipras continued to confront on Monday as officials from the eurozone pored over the measures put forward by his government late last week. Mr Tsipras must show he has the credentials to be a realistic partner Greece has to find a total of €450m due to be paid back to the International Monetary Fund by 9 April. German officials have made clear that the much-needed €7.2bn of undisbursed bailout funds would not be unlocked unless full agreement was reached with the lenders, the EU commission and the European Central Bank as well as the IMF. Haggling continued on Monday around Greek government plans over pensions, taxes and labour market reform. Overall, it has been a steep learning curve for the coalition formed by the radical left Syriza party and its populist rightwing partner, Independent Greeks (Anel). A week ago, Mr Tsipras found little leeway during a seven-hour meeting with Angela Merkel in Berlin. He may have delayed detailing the extent of his reforms in order to placate leftwing militants in Greece, who have accused him of reneging on his electoral promises. But his governing team has also made mistakes, with a series of provocations that have resulted in Greece finding itself dangerously isolated in Europe. Indeed, it has not been hard for Germany to point to the efforts made by other crisis-struck eurozone countries, in order to demonstrate that Greece had no special claim on EU generosity. Yet the survival of the Tsipras government is far from the only issue at stake here. If Greece dropped out of the eurozone, in an accidental “Grexit”, the consequences would be far-reaching. Not only would it damage the EU’s monetary union, the EU itself would be weakened geopolitically. Mr Tsipras must show he has the credentials to be a realistic partner. But, equally, Greece’s lenders must walk a fine line to prevent a breakup of the European project. Just as importantly for the EU’s democratic credibility, there must be room for negotiation. In Greece as in any country, it is never a good thing when voters’ choices end up being ignored. |