“Greece is a special case. Nowhere the extent of the problems was as large as in Greece, and the administration as weak,” Klaus Regling, the head of the eurozone bailout fund said in Munich on Thursday. German Chancellor Angela Merkel has been saying the same for years. “We have said time and again that Greece is a special case,” she commented in early 2012. Seven years after the first bailout was signed, Greece remains a “special case,” stumbling along the Grexit cliff, negotiating, up to the last gasp, the next sub-tranche of foreign loans. A “special case” or, as Paul Krugman wrote in 2012, a “lost cause”?
We are not lost yet, but, after so many sacrifices, with fear rooted inside us, nor are we saved. And if once we may not have been a “special case,” our exceptional inability to get out of the crisis has won us this bitter laurel. At the start of the crisis we could see Greece’s special problems, but we could also see the problems in the eurozone’s inadequate tools for dealing with problems, as well as our partners’ haste to save their banks while pushing old and new debt onto the Greeks’ shoulders. We could trade accusations with each other for our behavior before and after crisis struck, and blame foreign “usurers.” Above all, though, we could hope that this trial would end.
After Greece, other countries underwent the bailout scourge, with painful reforms and austerity, and came out on the other side. We, waving our “special case” flag, managed to get our crisis to beat the Great Depression for duration and depth. And it is not only the length of the crisis that makes us special but also our persistence in conjuring up arguments while avoiding actions that could help toward recovery.
Today, aside from the public debt, which the European Commission estimates at 179.7 percent of GDP in 2016, citizens owe 120 billion euros in taxes and social security dues. Nonperforming loans, which were at 5 percent of the total at the start of the crisis, are now at 45 percent. More and more people are pushed towards early retirement or unemployment, leaving fewer to pay taxes and social security fees. As “special cases,” our political parties did not see the absolute necessity of ending uncertainty at any cost, of coming to a basic agreement on the need for change, of having a joint stand against creditors and against the forces of inertia inside Greece.
This inability to deal with hard choices has played a greater role in the crisis than the problems imposed by the bailouts. Today, though, the greatest responsibility lies with those who, for whatever reason, allow the crisis to fester. Greece is, indeed, a “special case.” But now so are some of our creditors.