As uncertainty persists, the less-fortunate in Greek society undeservedly suffer
by Rahul Venkit
The “new normal” means different things on different continents.
For the Xi Jinping administration in China, it means lower, more sustainable growth targets and gradually shifting focus from exports to domestic consumption.
In Europe, however, the new normal is increasingly proving to be a state of constant crisis.
This entails unending emergency summits, flaring sentiments and protracted procedures producing underwhelming results on one hand and painful consequences on the other.
NO GREXIT, FOR NOW AT LEAST
True to form, there was no big eureka moment after the weekend's euro summit in Brussels meant to strike a deal for Greece. Seventeen hours of intense, often ill-tempered wrangling left the weary EU creditors in pole position and the desperate, humiliated Greeks licking their wounds.
The main victory -- and only solace -- was the official intention to keep Greece in the euro zone. Statements by several top EU leaders from Germany to France confirming this came as welcome relief as it wasn't a given going into the weekend.
With hash tags such as #ThisisaCoup trending on social media, however, it is evident Greeks aren't exactly celebrating. Especially keeping in mind that a majority of citizens had rejected precisely such austerity measures in the July 5 referendum.
Yes, the worst-case scenario of Grexit and bankruptcy seems to have been averted, but at a price -- the Greek “No” vote has been inadvertently turned into a far harsher “Yes”. In Twitter parlance, #ThisisReality.
The prospect of a Greek debt deal did boost global markets Monday. But the sense of fledgling optimism was short-lived after markets adopted a wait-and-watch approach to see if when one reads the fine print of what was agreed.
AGREE TO AGREE AFTER AGREEMENT
As things stand, euro leaders agreed to consider restarting talks over a third bail-out for Greece worth up to 86 billion euros over the next three years. With several strings attached.
For one, only if the Greek parliament rushes through sweeping reform and austerity measures on a tight timetable, with the first step of legislation required to be passed as soon as Wednesday. This path is fraught with possibilities of a Greek cabinet reshuffle, a unity government or even fresh elections in the fall.
Several national parliaments in the euro zone such as Germany and the Netherlands would also need to give their blessings before the start of formal negotiations.
In this regard, there’s no taking for granted the role of Europe’s smaller nations either. For example, Lithuania -- as the newest member of the euro zone -- would be participating in bailing out Greece for the first time. This year on, Vilnius will be making five annual installments of 60 million euros each to the European Stability Mechanism.
So, in essence, the EU and Greece agreed to possibly agree after agreement. None of which is certain at any stage.
It’s a long, winding road ahead with so many potential pitfalls that most would bet on Greece reneging if history is any indicator, as Stephen Richter’s piece illustrates.
Euro zone finance ministers will also discuss short-term bridge financing for Greece on Monday, as the European Central Bank keenly awaits a clear political message from Brussels before it can consider giving Greek banks more access to vital emergency funds.
THE HUMAN AND POLITICAL COST
Many would argue the fate of euro zone integrity and European solidarity at large is still hanging by a thread.
Yet, in typical fare, the outcome of latest negotiations has been enough only to kick the can further down the road. Just about sufficient to keep trudging along but with the prospect of new, bigger problems in the future looming large.
A lack of fiscal union in the EU does make an arduous task of justifying a transfer of funds from richer to poorer nations. In more developed unions such as the United States, India and China, such federal transfers are routine.
But most would still agree the Greek debt problem is fundamentally not about money but about broken trust and politics.
The funds to rescue Greece for a third time definitely exists in the coffers of Europe. But how to ensure there is no fourth bailout down the road? How to right the wrongs of years of unscrupulous borrowing and lending?
Will Greece miraculously succeed this time in implementing deeply-resisted measures such as cutting political appointees in a bloated public sector and enforcing strict tax collection?
No easy answers exist to the above. Yet in the interim, the less-fortunate, newly-graduated and infirm in Greek society cannot be made to bear the brunt of the irresponsible behavior of previous governments.
Keep in mind that while tough measures are debated in Brussels and approved across Europe, sections of Greek society continue to live through hell every day, with highly restricted access to money and medicine.
Europe has the means to address the growing humanitarian crisis in Greece, and should do so without delay.
If not, Europe’s constant crisis risks turning into an existential one.