When quizzed about whether he is considering calling early elections, Prime Minister Antonis Samaras customarily replies that the country will go to the polls in 2016. Too bad few people believe that to be the case. There is nothing that Greece needs more than normality and stability. Whatever primary surplus the country produces, no matter how many investors come in search of business opportunities, nothing will ever change if no one knows which direction the country is taking.
Greece has been a “normal country” during certain periods in history. These days normality is something to strive for. On the one hand we realize the importance of keeping it together as a nation, while on the other we flirt with national division, major conspiracies and preparing the ground for entering an “abnormal” phase.
The country’s partners and lenders also carry a large portion of responsibility. Irrespective of political leanings, all leading economists agree that for the Greek economy to recover, a solution to the country’s debt problem must be found. This is where the country finds itself entangled in a huge, three-party fight. Germans and other Northern Europeans exclude a haircut because it is illegal and because it would not be approved by their respective parliaments. They suggest a compromise which would hide the real haircut, but they also hesitate to clarify what and when this could happen. Now they’re even postponing this until after the European Parliament elections so as to avoid their own public opinion being negatively influenced. Meanwhile the International Monetary Fund supports the idea that Greece’s debt to Europe be restructured, knowing that what the country owes to the IMF will not undergo a haircut. The European Central Bank seems angry that it got involved with Greece in the first place and is playing its own game. The cloud of doubt over Greece will never leave, however, if things go on like this. When the country faced the danger of exiting the eurozone, it paid a hefty price in the form of capital flight and a complete lack of investor interest. Now the vagueness surrounding the country’s debt and the troika’s intentions has placed the country back in the vicious circle. To a certain extent, I can understand our lenders’ doubts and them thinking, “What if we write off the debt and their political elite starts spending uncontrollably and appointing people to the state sector again?”
Ultimately, the solution lies in the principle that arranging the debt is a one-off and then we’ll be on our own. This means that whatever deficits we produce we will have to cover through borrowing from markets or by printing small pieces of paper of little value to pay for public sector needs.