Let?s assume that the Greek government will take all the tough decisions than need to be taken and, most importantly, see them through in the next 45 days. Prime Minister Antonis Samaras and his two coalition partners know this is Greece?s last chance and that failure, or a government collapse, will push the country out of the euro area.
Samaras and his economic policy advisers appear ready to shoulder the political cost. At the same time however our European peers need to respond in a fast, straightforward fashion.
The Greek people are way beyond breaking point. Also, they no longer believe the current path can lead us out of the crisis. Provided Greece meets its commitments, its EU peers should provide an extension to the fiscal adaptation program, a possible haircut on the sovereign debt and measures to bolster liquidity and encourage infrastructure projects.
Above all, they must curb speculation of a Greek euro exit. This is the only way to get the Greek economy back on its feet, and encourage investment and privatizations so people can once again see light at the end of the tunnel.