The Greek Crisis and the Eurogroup Negotiations
The Greek Parliament in Athens

On Monday 22 June there was yet another Eurogroup meeting in Brussels concerning the Greek crisis. But like many previous attempts to reach an agreement, a conclusive decision was again postponed. Meanwhile in the Greek capital Athens, people are anxiously waiting for an answer. The country is once more divided over its future.

Two major rallies were organized by the two opposing camps in front of the Greek Parliament last week. The “We take negotiations in our hands” demonstration was in support for the SYRIZA government, plus its negotiations with the “institutions.”While a day later “We stay in Europe,” rallied in support for Greece’s euro-zone and EU membership.

In reality the situation is not black and white. There are people who oppose austerity but not for ideological reasons, and support the euro and EU membership. They just don’t think that this kind of austerity is working and stand with SYRIZA because they desire a renegotiation of Greece’s debt and a compromise. In other words, not all government supporters are against the euro or EU.

Equally so, not all pro-euro activists support austerity. Most Greeks are fed up with social injustice. Europe now has a responsibility to listen to them and try to compromise; not for the sake of SYRIZA, rather for the average Greek citizen.

It is disappointing that European governments, including the Greek one, chose to engage in a meaningless tug-of-war at the expense of ordinary people; in Greece and elsewhere in Europe. And that just so to satisfy the economic interests of very small elite of the continent, who want to get the maximum return for their money. The euro-zone crisis was not created by Greece, rather primarily by the faults in the euro and the greed of the European banking sector.

The country needs a long term development program, which will be supported by its European partners, rather than harsh austerity or myopic populism. Both sides of the argument got this wrong.

The Leftist government in order to satisfy its voters, sticking to its pre-election promises, decided to reverse some of the previous government's actions. Apart from people pleasing, their actions are not constructive. For example, rehiring the Ministry of Finance cleaners may be a very noble thing to do plus it gains votes and support for them. But it is not helping the economy under the current turmoil.

Greece urgently needs to find an agreement and lift the heavy burden of its debt, then proceed with promoting social justice policies. Yet Greece’s current status is not the fault of SYRIZA.

The country was literally a poor country, trying to live as a rich one. Even so, Greece’s woes are not all down to its corruption and reluctance for reforms. Sharing the same currency with Germany, Europe’s economic powerhouse, forced Greece to overspend.

In other words, the main cause of the euro-zone crisis is how the euro was created. Its structure was built on very weak foundations, with no real fiscal unity. The initial vision for the euro was to create a truly united, equal Europe. On the contrary, the result was the very opposite. However if Greece was allowed to partially default on its debt from the beginning, the situation today might be different.

Realistically Greece’s debt cannot be paid. In addition, austerity has not worked; it has actually made the debt situation worse. Thus there is no reason for Europe to insist on it and prolong this situation.

The only solution is a compromise between Greece and its creditors, which would include a drastic reduction of Greece’s debt. In return of course, a commitment by the Greek government to proceed with necessary reforms. Greece could default and leave the euro-zone, then rejoin when it gets its house in order. Still such a move is not desired by either party, because it could lead Greece and Europe into uncharted territory, in which neither is willing to go.