Tuesday May 5, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
OK, no memorandum, but what then?

The most effective way for Greece to maintain its ties to the eurozone within the context of a less aggressive austerity program would be to increase the number of people the troika negotiates with. SYRIZA leader Alexis Tsipras will have to choose whether he will contribute toward containing the crisis or opt instead for a leading role in the final act of the Greek drama.

By Babis Papadimitriou

If the electorate wants a government but without the memorandum, then we’ll probably have to head back to the polls, and the parties might as well give the people a chance to explain what exactly they were looking for when they cast their ballots.

Unfortunately all of this matters very little in light of the acceleration of the economic crisis, because one of the first questions we should be addressing is what we would replace the memorandum’s austerity program with. As international capital steadily flees the European bond market and other investments on the continent, the channeling of fresh funds into the eurozone via the European Central Bank remains the only likely alternative. Yet even though the ECB has supplied eurozone banks with huge amounts of money (some 1 trillion euros), new loans are only being issued in countries that still maintain a decent level of economic activity. States such as Germany and the Netherlands can bankroll their own economies from their primary surplus.

However, Greece cannot, and this could prove a problem for those who made pre-election promises to pull out of the bailout agreement. Representatives of SYRIZA and the Independent Greeks insist that the government’s current revenues are sufficient to cover public sector salaries and pensions if we stop “paying interest to the foreigners.”

They are making three mistakes, however.

The first is that this is absolutely not true given that tax revenues remain insufficient to meet the country’s costs and are certainly not enough to cover salaries and pensions -- even if the state continues to withhold payment from its suppliers. Secondly, they are factoring into the state revenues money sources which are not constant and are set to cease -- funding from the European Union and emergency levies such as the property tax and the solidarity tax.

Furthermore, if the “I won’t pay” mentality prevails on a governmental as well as a societal level, it is certain to be the economy’s undoing.

Finally, correcting the “injustices” and reversing the “cutbacks” stemming from the memorandum will dramatically increase the state’s operating costs, while banks will be irreversibly damaged by skyrocketing delays in debt servicing and hundreds of businesses closing down.

The idea put forward by some leftists groups for a three-year freeze on interest payments on the bailout loans is something that could be put up for negotiation with Greece’s creditors -- the European Central Bank, the European Commission and the International Monetary Fund. Their representatives are unlikely to refuse to discuss a proposal that could help to avert a rift between Greece and the eurozone, and they may even be anticipating a request for the write-down of Greek debt to be extended to the interest due in the next three years and to the payments arising from the first memorandum. Of course it’s pretty certain that they would only discuss these possibilities on the condition that all the other terms of the memorandum would be adhered to.

In conclusion, the most effective way for Greece to maintain its ties to the eurozone within the context of a less aggressive austerity program would be to increase the number of people the troika negotiates with. SYRIZA leader Alexis Tsipras will have to choose whether he will contribute toward containing the crisis or opt instead for a leading role in the final act of the Greek drama.

ekathimerini.com , Monday May 7, 2012 (21:11)  
Varoufakis should be heard
Wrong from the start
Mixed signals
Symbolism and reality
Dozens of migrants rescued at sea
The Greek coast guard and port police rescued dozens of migrants in six separate incidents over the course of less than 24 hours, the Athens-Macedonian New Agency reported on Tuesday. The fi...
Pressure grows in talks
As negotiations continue at the technical level in Brussels, Greek government officials have significant meetings planned on Tuesday in European capitals in a bid to tackle the country’s loo...
Inside News
OTE vies for control of Albtelecom
OTE telecom is said to be in talks regarding the acquisition of Albanian telecommunications firm Albtelecom, having had a presence in the neighboring country since 2000 through the AMC cell ...
Uncertainty, cash crunch keep entrepreneurship in stagnation
The dominant feature of the Greek business sector in recent months has been stagnation, even in cases classified as entrepreneurship of necessity. The trend that started in fall 2014 strengt...
Inside Business
TRACK & FIELD
Over 18,000 runners participate in the Athens Half Marathon
The 4th Athens Half Marathon was an unqualified organizing and sporting success on Sunday, as thousands of runners joined in the race of the 21-kilometers and the 3k and 5k runs in the capit...
SOCCER
Six teams to fight to avoid the last relegation spot
Panthrakikos was the biggest winner of the penultimate round of Super League games on Sunday through its victory at Veria, on the day that Olympiakos partied for its fifth consecutive title....
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. OTE vies for control of Albtelecom
2. Dozens of migrants rescued at sea
3. Pressure grows in talks
4. Uncertainty, cash crunch keep entrepreneurship in stagnation
5. Small decrease in registered jobless at OAED
6. Worrying signs for tourism
more news
Today
This Week
1. Dozens of migrants rescued at sea
2. OTE vies for control of Albtelecom
3. Varoufakis should be heard
4. Greece cites progress in talks with lenders, aims for May deal
5. Greek jobless legacy adds to danger for Tsipras as funds dwindle
6. IMF being stubborn on measures, says Skourletis
Today
This Week
1. The Good, the Bad and the Ugly
2. Greece’s day of reckoning inches closer as debt payments loom
3. Greek decision to exit euro would be disastrous for Greece
4. Greece’s decade-long relationship with Merkel
5. Varoufakis attacked by anarchists while dining in Athens
6. No need to widen the rift
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.