The rescue deal signed on July 21 was followed by a lot of self-congratulatory back-slapping among European leaders and much fanfare by the Greek government intended for public consumption. Many analysts, however, showed no reticence in expressing their misgivings about the agreement, which they found vague and inconclusive.
Back in Greece, the gray areas of the deal and the tough projections of market analysts were camouflaged in misleading translations of the terminology of the agreement and categorical assurances that everything was fine and dandy. But how long can a lie survive when the real facts come crashing down?
Within just a few days, the precarious construction of the deal began to be pulled apart by the reactions of the markets, which remain unconvinced of the eurozone leaders? serious intentions to get the situation under control. And rightly so, because if the politicians are making decisions in order to convince the markets rather than to regain control of matters within their purview, then the markets are the competent ones to pass judgment on this spasmodic policy. They are the leading force in the Europe of 500 million citizens. Political parties, representative institutions, nation states and societies are the weakest players in the tug of war.
The bilateral decision made by German Chancellor Angela Merkel and French President Nicolas Sarkozy to put off the introduction of Eurobonds and to impose stricter fiscal discipline on countries already experiencing a deep recession simply provoked new nosedives on the stock markets and even darker projections.
Jacques Delors, an experienced French economist and politician and one of the architects of European Union policy, once said that by promising the markets major institutional changes that we know we cannot bring about, we are simply shooting ourselves in the foot. A pragmatist and also one of the fathers of the monetary union, Delors has also criticized Merkel and Sarkozy for their opportunism and political selfishness, as well as highlighting the deficit of political will within the EU.
Greece right now is paying for its own sins, but it is also paying for the current crisis in the European Union. The real assurances for the second bailout package and the successive wave of austerity that is to come are but another act in the unfolding drama.