Wednesday

17th Aug 2022

Opinion

Greece's future is in the eurozone

  • 'Prime Minister Samaras and his broad coalition - in office for under ten weeks - clearly have a colossal task to complete' (Photo: CameliaTWU)

Dubium sapientiae initium - Doubt is the origin of wisdom - could have been René Descarte's rather poetic interpretation of the European Union's founding moment. The doubts as to how the nations in Europe could coexist after the Second World War gave way to the greatest union of citizens, countries and markets we know today.

Yet the doubts regularly voiced about Greece's future within this union are not poetic, they are harmful and dangerous.

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German Chancellor Merkel may well repeat that she wishes for Greece to remain in the eurozone; but so long as her coalition colleagues jump on every opportunity to reaffirm the probability and feasibility of Greece exiting the eurozone, Greek Prime Minister Samaras is right to point out that such comments will not go unnoticed by foreign investors - one of the income sources Greece so badly needs right now.

Therefore, the incessant talk of a Greek exit must stop and it must stop right now. Enough time has been wasted with loud words - what matters most now is targeted action, especially so close to the publication of the next Troika report which will undoubtedly bear important consequences for the country's people and economy.

Prime Minister Samaras and his broad coalition - in office for under ten weeks - clearly have a colossal task to complete. What the past few years since the beginning of the crisis have shown beyond doubt is that austerity measures alone are not going to end Greece's problems. By capping public spending - in particular on areas vital to the country's future like education, medical facilities and social institutions - the state prevents itself from taxable incomes, job creation and long-term functioning infrastructure.

What Greece really needs, and what the trio Samaras/Venizelos/Kouvelis are seemingly trying to do is to implement sustainable structural reforms of the mechanisms of public expenditure, tax collection and distribution. The country must rethink and restructure the foundations, functioning and mechanisms of the state to make it more efficient and adapted to economic reality - simply cutting costs regardless of the consequences for the people has already led to social injustice and misery, to near suffocation of internal demand and growth and will continue to do so.

The road ahead will not be easy and it cannot be completed overnight. Yet Samaras' coalition is proving its commitment to sober economic governance by having already broken with a number of traditions. Tackling public official's oversized benefits and committing to a serious reduction of public staff - and publicly admitting the utter failure abiding by the bailout terms in this area in the past - as well as scrapping the highly symbolic press conference at the Thessaloniki Fair and substantially lowering the government's pay are small steps, but they all point in the same direction.

Of course, tax evasion and corruption remain problematic in Greece but with one in two youths unemployed, a 40% increase of the national suicide rate and a population wondering how to pay for staggering costs of healthcare and food, it is high time to restructure harmful austerity measures to find a new balance and social justice.

Even with the most basic economic knowledge, it is obvious that what Greece requires to get back on its feet is economic growth. Privatisations and increased efficiency as well as serious cutting of red tape will facilitate investments and projects resulting in job creation and therefore increase the number of taxable incomes, simultaneously providing opportunities for the jobless in Greece. These measures will need the support of Greece's partners, the Troika as well as the EU member states.

It is now our task as Greece's European partners - and I explicitly include all national and European politicians - to not spoil serious efforts by continued talk of a eurozone exit or even a complete eurozone collapse.

For the EU to prove its commitment and unreserved, economically sound support, the European Central Bank (ECB) must be given the space and independence to execute its mandate - a national parliament veto as suggested by certain voices would result in further paralysis due to decisions motivated by national political agendas as opposed to reasoned economic action which could finally lead to more stability.

Stability for Greece will consequentially result in stability for the eurozone, to the benefits of all in the union, without doubt.

The writer is President of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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