Greece: The Way Forward
By James K. Galbraith
February 21, 2015 "ICH"
-The Greek government is in Brussels to
discuss the full range of economic issues
with its European partners, including
budgets, debt and structural reforms. At
issue is whether funds will be available to
keep paying the bills, on policy terms that
Greece can accept.
Two factors complicate this issue. The first
is the past Memorandum, alongside a set of
tight deadlines, created by the previous
government in part to entrap the new one.
The second is the European decision-making
process, which gives great apparent weight
to governments of small countries, many of
whom are internally insecure. The easiest
path for them is to insist on no changes;
anything else amounts to self-rejection.
So far, the Greek achievement consists of
stating raw truths in rooms full of
self-serving illusions. This exposes
contradictions, bringing on facile ripostes,
easily rebutted. It also brings on threats
and menacing gestures, intended to test
resolve. The Greek government seems to have
met that test.
It can now proceed to the next step.
The next step is to define carefully what
may be accepted. As for reforms, as much as
70 percent of the previous memorandum is
(and always has been) common ground. That
which is not fire-sale privatizations,
destructive labor market liberalizations and
the unreachable 4.5-percent target primary
surplus can be spelled out. Reasonable
language to describe the process of
discussion to follow may be found.
When this is done, the final decision will
be up to Europe and to Germany, above all.
Will Berlin continue to squeeze, in order to
pressure, and so risk bringing on a Greek
collapse? If so, it will be better to know
soon. But Europe may well decide, if not
from pragmatism then from a larger strategic
vision, that Greece cannot be allowed to
fail. In that case, agreement may be reached
and the revival of Greece may begin.
James Galbraith is the author of The End of
Normal: The Great Crisis and the Future of
Growth.Copyright © 2015, H
KAΘHMEPINH
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