Greece, the euro and Solomon’s wisdom

Today we will see who cares more for the future of the Greek people and for the eurozone’s stability, and which government places its own prestige above all else. Will Athens give more ground? Will Berlin remain unyielding? The 19 finance ministers of the Eurogroup face a paradox: they know that what is good for the Greeks is good for the common currency and vice versa – but the clumsy handling of the issue by the protagonists of the drama has created division which harms both Greece and the euro. How can the rift be bridged so that Greece can return to its efforts for economic recovery and Europe can move toward greater union?

The Greek government has covered a lot of ground from its initial promises to halve the public debt, reject the austerity program in whole, roll back many reforms and turn its back on the troika of creditors. On Wednesday, Athens asked the Eurogroup for a six-month extension of the aid agreement and accepted many of its partners’ demands – to the point that this was widely seen as capitulation. Of course, the proposal was murky on several points, so that the government could save face but also implement at least parts of its policy. This was quickly noted by the German Finance Ministry, which rejected the Greek proposal.

It is significant that Greece made major concessions whereas Germany remained fixed in its position. We could argue, of course, that Greece had to cover a greater distance because it had strayed so far from the bailout agreement it had reached with its partners, whereas Germany was simply insisting on the restoration of order. But it is also clear that Berlin needs to show some flexibility in order to achieve progress – given the weaknesses, mistakes and many injustices of the program implemented in Greece.

The rigid imposition of the agreements (with only some unclear promises of future flexibility in the program) mirrors the initial rigidity of the Greek government, which put its utopian promises above the need to come to an honorable compromise with its partners. Athens started off by drawing red lines across existing agreements and commitments, presenting any effort at compromise as an effort to blackmail it into surrender.

Fortunately, the German “no” did not derail today’s Eurogroup meeting and there is still some hope for an agreement that will allow both sides to work toward the stability of the Greek economy and of the euro. If both sides move a little closer they may just achieve this. Then Greece will be able to turn toward problems that need urgent attention and the EU will have shown that with some flexibility – in a show of leadership and not vengeance – it can keep alive the spirit of communal progress.

It doesn’t take the wisdom of Solomon to see that the defeat of one is the defeat of all.