Greece keeps suffering. It’s one postponement after another. Until last night, the Eurogroup would not say a final word about the Greek debt, despite the fact that Athens has fulfilled all its obligations, with the approval of the umpteenth painful pension cuts.
Again, the German finance minister, the hawk Wolfgang Schauble, expressed his resistance. He insists on repeating that there cannot be a decision on the debt issue before the end of the support program for Greece, which is more than a year away. This, of course, is in contrast with what the International Monetary Fund is asking for urgently. The latter has made this basic concept very clear: To continue to support Greece, there must be debt relief.
There has not been any white smoke, but perhaps the clouds are starting to thin out. On Monday there was a telephone conversation between the new French President Emmanuel Macron and Greek Prime Minister Alexis Tsipras. They expressed their common position in favor of a solution that will be beneficial both for Greece and for the Eurozone as a whole. This compromise will get the Greek economy restarted.
The message is that the era of extreme positions and austerity dictates is over, and Berlin needs to finally be able to understand that also. In fact, some people have understood it but have not been able to impose their positions. The foreign affairs minister, the Social Democrat Sigmar Gabriel, told the press that “Greece has been promised the easing of its debt over and over again,” and therefore “it’s time to keep promises,” because “everything shouldn’t fail because of German obstructions.” Gabriel’s spokesman added that Germany should not isolate itself on this topic.
But also the new French Minister of the economy, Bruno Le Maire, said that “it’s time to make decisions that will ensure a better future for Greece.” The French front is the most active at this stage. Not surprisingly, the European Commissioner for Economic and Monetary Affairs, Pierre Moscovici, recalled that “the Greek Parliament passed a tough package of measures, which requires new brave and necessary efforts,” and that therefore “since the Greeks kept their commitments, the European partners must do the same.”
Athens hopes that both glitches are temporary and that finally we might see the light at the end of the tunnel. “By June 15, there will be a decision indicating how the final decisions on the debt issue will be made,” says Energy Minister Jorgos Stathakis, one of the most active supporters of the theory that with less of a debt burden, Greece will attract more investment.
According to Stathakis, “we cannot hold the decision until after the German elections” in October. The central question, however, is whether Berlin will finally — although late — show some political foresight, by finally giving precedence to European interests over small domestic factors.
The Tsipras government insists that the requested reforms, and especially taxes, will make no sense if the country is not allowed to return to the financial markets, thanks to a sustainable public debt. Otherwise, the economic dependence on lenders will be perpetuated indefinitely. It seems elementary, but obviously, there are those who still have doubts or pursue different projects.
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