A German proposal that misfired

It had been apparent for a number of years that Greece needed a brisk spring cleaning. Even in the heyday of the fat cats it was evident that no one was worried about the fact that the balance of payments was increasingly in the red. That was until the bubble burst. Then we came to realize, on a theoretical level at least, and primarily because foreigners pointed it out and banged it home, that somehow Greece would have to balance its budget and show a surplus in order to get away from austerity measures, to stop borrowing and to be able to pay its creditors.

Unfortunately the Greek side did not show the necessary willpower or any particular inclination to tidy things up. There is no point in discussing who is to blame and why, because opinions differ. The result is that pressure on Greece from its creditors gradually grew when the latter realized that the Greeks were either unwilling or unable — or most likely both — to put their house in order.

Foreign reaction initially came in the form of admonitions and directions, before moving on to dispatching officials to help politicians and the administration to tidy things up in certain sectors, before ending in a document distributed as ?non-paper? by the Germans to their eurozone partners. The document proposes the appointment of a foreign official to be put in charge of Greece?s finances, whose mission would be to ensure that the top priority is debt servicing. And what?s more, that this particular official should be recognized by the constitution.

The proposal for the appointment of a ?commissioner? was put forward by Germany?s Christian Democratic Union and came as a nasty surprise. In the past, Greece had come under international financial supervision because it was bankrupt and creditors got their money through state monopolies. During the Marshall Plan period, American officials were posted at Greece?s ministries, signing every single expense sheet. Basic political rationale should have dissuaded the Germans from making such a proposal today. First of all because it was phrased in such a raw manner, secondly because its implementation would inflate the ranks of the Left and the anti-Memorandum campaigners, and, thirdly, because it undermines efforts toward Greece?s adjustment to European standards.

Unless of course the proposal was aimed as a provocation, either in order to impose a form of tighter supervision of Greece that would appear more reasonable than a commissioner, or in order to push Greece out of the eurozone on its refusal to submit to open guardianship.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.