Over the course of the crisis, every prime minister of Greece has needed a big vision – or a pipe dream for that matter – to keep him going.
For Alexis Tsipras, debt relief appears to be his Ithaca. The country’s leftist leader, in other words, believes that reaching an agreement on debt with the country’s lenders would enable his political survival.
One question is how Greece is going to cover the distance from where it stands now to an eventual negotiation on debt. Even if we assume, for the sake of argument, that we arrive at that point, Tsipras would still have to face two major problems.
The Greek debt has over the past few years been elevated into the holy grail of political confrontation. The SYRIZA chief and the rest of the anti-bailout folk managed to convince a significant chunk of the public that tough bargaining with lenders would open the path for a significant reduction to the country’s mountain of debt. But this is something that is never going to happen. No European government would ever accept a settlement of this sort. Any agreement that may be reached will give Tsipras, as well as other politicians that cultivated similar expectations, far less than they hoped for.
The second, and perhaps bigger, problem is that any agreement on debt restructuring would come with very strict terms. Major European leaders have agreed that any relief – through the extension of maturities, a reduction in interest rates and so on, would be meaningless without strict terms and close supervision.
People who are involved in the issue are perfectly clear on this: Greece’s credibility has been seriously damaged and if the country were left to its fate it would soon default all over again. I am far from certain that this particular administration could shoulder the burden of what would effectively be a fresh bailout agreement, a deal that would inevitably include strict terms and tight supervision, in exchange for a debt settlement.
“You know, I think we’re screwed,” a conservative deputy, famous for his appearances on morning TV shows, once told a former prime minister. “We used to think that climbing to power was our Ithaca. But now that we finally got there, I see that the dog has died, the wife is long seeing another man and the trees have withered away.”
Jokes aside, the most likely scenario to unfold in the months ahead of us is rather sobering. We have dug ourselves so deep into the hole and we have tarnished our credibility so badly, so as to allow our critics the right to make a happy ending the most unlikely plot.