economy, europe, World Politics

Greece will recover if the EU is realistic and pragmatic

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Violent protests are choking up streets, almost a quarter of the nation is unemployed, and taxes are at unprecedentedly high rates. A country which has faced economic despair for over eight years, Greece is still in need of a realistic, long-term, and sustainable plan in order to rejuvenate its ailing economy. It is time that the European Union accepted that it should not bring Greece to adhere to unrealistic conditions. Instead, it is in the Union’s interests to – albeit begrudgingly – hand the Greek people the support they need.

Greece’s economy has barely improved even with international ‘aid.’ There must be something going wrong with the present strategy. Greece’s level of debt is eating away at the livelihoods of ordinary people, sitting at around 180% of output. It is estimated that as much as 75% citizens’ earnings is being taken in tax revenues, alongside other harsh, EU-imposed austerity measures. Greece’s unemployment is now more than double that of the EU average. Austerity is not working, and the lives of citizens are not improving. It may, in the long-run, make a stronger economy, looking at only the macroeconomic situation. But for the average Greek, their personal income and quality of life will not markedly improve. Surely this should be the primary goal of the EU.

The national economy can only recover through investment and employment, in the same way that many of the world’s greatest economies started. The Greek parliament last week was backed into approving €5.4bn of controversial budget cuts. For a nation that voted “oxi” – or “no” – to extensive budget rescaling last year, this is surprising. But is it that surprising, really? The international press and our leaders will keep telling us that Greece has no other option. But really, this is just highlighting the crippling monopoly of the European Union.

I’m all for the EU, but only with increased reform and a revised mindset. The time for a review of the supposed Greek recovery has come, but quarrels between the European Central Bank, Eurozone, and International Monetary Fund are continuing to stall any workable progress. The EU has the chance to serve one of it’s most important functions – to uphold its true values of solidarity, and support its member states in calamities. With particular reluctance on the part of the German government, it seems that Greece and its people will not come back to life unless a form of compromise is made. A harsh economic dictatorship, being orchestrated by Merkel, is neither an intelligent nor viable strategy for a Greek recovery. Amidst worrying social unrest, the Greek government simply has no choice but to succumb to the rigid conditions of troika.

This week, Christine Lagarde of the IMF has reported a significant contraction in the Greek economy, and that the aspirations of the EU for Greece are largely unrealistic. In order to progress to the next stage of bailout, the Greek government must repay €3.5bn by July. But achieving any form of budget surplus means harsh austerity measures, passed as parliament grit their teeth. The only option which could lead to true stability and progress is if member states contribute to a stronger Greek economy, by aiding with debt relief, and if the EU’s expectations are reduced.

Selfishness from the European Union will only lead to increased calamity, and not only financially. Supporting Greece is in member states’ interests. Economic solidarity is necessary in multiple respects, and is what the European Union ought to stand for. Without true moderation and aid, Greece will decline in many ways. Less investment and support will mean more unrest. Greece’s streets have already become increasingly violent, and there is no sign of the chorus of opposition waning. Does Merkel really want to lug around a socially unstable state? Furthermore, chances of tyranny and political instability would only grow.

Unless the EU comes truly to the rescue, the current left-wing government will grow more unpopular, and the anti-establishment, austerity-defending hard right will succeed. Without a good cash flow from Brussels, economic growth will never be high again for at least the next decade. The lives of Greek citizens will become arduous and their prospects weak. There is no denying that it will be a long, hard slog. Choosing to ignore Greece to the furthest extent possible is not a realistic or pragmatic option. Money must be used as an incentive for growth and rejuvenation, not just something to tick a box. The focus must turn to getting people back into work, and reducing austerity to a more acceptable level. Only with a long-term plan which combines components of balance and sustainability will Greece be able to emerge re-energised.

No decision will be favourable, and no form of austerity desirable. But at the moment, the EU is in its own bubble. Christine Lagarde and the IMF have the power to pop it. The creation of a realistic plan should be fast sought. There is no quick fix, but if the government can present a collective strategy with visible, incremental improvements, Greece will be slowly reincarnated. The European Union needs a reality check. It is undermining its own principles of solidarity, support and prosperity. When realistic and pragmatic strategy emerges, with a plan spanning the next decade, the Greek people may finally be a little more content. By ignoring the seriousness of the Greek crisis, the EU is only creating more problems for itself. Unrest will plague communities, government popularity will further decline, the hard-right may well conquer another European region, and individuals will become tired. Surely the nurturing of economic demise is not something the EU wants to credit itself with.

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