A question of trust
Thursday’s press conference involving the finance ministers of Germany and Greece was like a scene from a play about trust. Wolfgang Schaeuble appeared to have absolutely no faith in the Greek side – making frequent references to the Greeks’ own culpability in their woes – while Yanis Varoufakis went all out to win over his German audience. In the end, Schaeuble’s fortress remained impregnable but Greece’s position was heard.
The German government says Greeks are to blame for the economic problems that led them to seek help in 2010 and remain at fault for the country’s failure to turn around because of the ineptitude of Greek politicians in executing the program and failure to clamp down on tax evasion and corruption.
The causes of the crisis that Greece faces today “lie in Greece and not in Germany,” Schaeuble said. He repeated that Athens needs to act within the institutional framework and within the existing program, adding that access to the markets – a problem faced by the Greeks, not the Germans – is what is most important at this point.
That, in a nutshell, is what Thursday’s meeting in Berlin was all about.
Varoufakis vehemently argued for the need for a “bridge” deal that would ensure financing through May. He said the government needs until then to draft its final plan and that this will be more comprehensive than what it is proposing today. But as long as Greece does not recognize the existing program, its partners and creditors are not willing to help, as both Prime Minister Alexis Tsipras and Varoufakis were told throughout their tour of Europe this week. This was also underscored by the European Central Bank’s decision on Wednesday to stop accepting Greek bonds as collateral to finance local banks.
Demands for a generous debt writedown, an end to the austerity program and other such measures SYRIZA heralded in its pre-election campaign, are being replaced (at least for now) by a request for a financing bridge and a debt-swap proposal. Athens has shifted from some of its original positions but we still have to wait for the prime minister to announce the government’s program before jumping to any conclusions.
Greece’s partners don’t seem to trust the proposals of Tsipras and Varoufakis, repeating that Greece must stick to its commitments. The partners would have a better chance convincing the Greeks if they admitted that previous governments were forced into these commitments under the pressure that financing would be stopped. The Greeks had to trust the troika program – they had no other choice. They paid for this trust and now they are paying for our partners’ lack of trust in the new government.
In these ruins of trust, the bridge that is needed is between Greece and its partners.
