Like it or not, the discussion on whether Greece would be better off with its own currency will flare up again. All around us we hear people questioning whether the current situation is sustainable, pointing to the fact that overtaxation is strangling households and the economy, and generating a sense that the country is in a black hole. Public opinion polls also suggest the euro is losing its allure. This, moreover, is happening at a time when the forces of populism and euroskepticism are gaining ground across the European Union. Basically, we are lucky not to have seen the rise of some charismatic, populist and nationalist politician expressing this part of society.
A discussion about Greece’s prospects should not be taboo, however, even though we have fought hard for the euro and Greece’s place in Europe against the powerful winds of nationalist populism. But when you ignore the conversation going on around you in whispered tones, you risk being blindsided.
Right now we have a government that claims to believe in the euro and has suffered an enormous political toll for keeping the country on the European tracks. That said, it is also a government with a powerful pro-drachma element. It talks about the euro but then governs as though it were in the drachma era. That is one of this country’s tragedies: Reforms are influenced by a mishmash of pro-euro and pro-drachma policy.
When I imagine the country outside the euro – and possibly the EU as well – I admit I get very, very worried. With few exceptions, our political system is irresponsible and inadequate. After a brief period of euphoria, it would turn the country into a state without rules and skyrocketing inflation. Investors would run off, because even now under Europe’s umbrella, Greece is still a country businesspeople are hesitant to sink their money into. The public administration would be in shambles and unable to carry out the task of reconstruction that would be required. Greece would almost inevitably become like Venezuela, at the mercy of oligarchs and under the IMF thumb. And let’s not forget about the geopolitical consequences and the image of weakness that would be projected to our neighbors, though this is the most important thing for a country in our position.
To stay on the European path, however, we need a government which truly believes in the reforms that will unlock Greece’s significant potential. We will also need our foreign partners to understand that excessive austerity is like a straitjacket which can only lead to destructive results.
The drachma is not a solution, yet increasing economic pressure and the drachma culture that prevails in much of our political system and public dialogue is pushing us in that direction. And that is something we cannot ignore.