The Greek Bailout Program: Pacta sunt servanda

In the Eurogroup of May 22 an important step has been made towards the conclusion of Greece’s bailout review. Nonetheless, there was no definite agreement on debt relief, as the issue was pushed further to the coming Eurogroup of June 15, causing a harmful delay both for Greece and Eurozone. The Greek government has made clear that it will only support an inclusive solution, i.e. one that indispensably includes concrete mid-term measures for debt relief. 

The stance of the Greek side abides by what has been agreed in the context of the bailout deal, it respects the decision of Eurogroup, and it takes into consideration the adjustment program for the post-2018 period. Same goes for the creditors and all parts involve in the deal.

The delay observed has been caused by the reluctance of the German government, and especially of the Finance Minister Mr Schauble, to agree on specific debt relief measures. International and German media are harshly criticizing Mr Schauble’s negative and inconsistent stance on the Greek issue, stressing out that he creates problem for Greece and for the European cohesion altogether. His short-sightedness and quest for putting his party’s interests above the European common interest is dangerous for Eurozone’s stability.  

We should note here that since the establishment of the European Union, concessions, negotiations, and the respect of the common rules and joint agreements have been the driving elements for the Union to properly function and deliver. This modus operandi has secured stability, prosperity and peace for the Union, in a fragile and ever-changing global environment.

This mutual interest cannot be replaced by the national interests of a single member-state. Germany should respect the agreements, fulfil its commitments and avoid acting unilaterally, depending on what is at stake domestically or whenever national election comes up - i.e. like the coming one in September 2017.

The reluctance of the German leadership to agree on a definite solution on the Greek issue goes also against the will and commitment of the majority of other Eurozone member-states and the European Commission. The German stance is not a sign of democratic behaviour and the outcome of collective agreements, but a unilateral decision that undermines the positive role of Germany in the EU process of political and economic unification since the beginning of the 1990s.       

The Greek people has suffered a lot during these seven years. The previous governments, before and after 2010, have plunged the country deeper into recession and instability, deteriorating the already huge structural problems of the economy, throwing in the dustbin all sacrifices and efforts made by the society.

The Greek government has achieved to improve economic outlook in a very short period of time, to modernize an ineffective and clientelistic public sector, so that it can become credible and functioning in the long-run, pushing for reforms that were necessary and should be adopted long before. Public finances have been stabilized, the economy has started heating up its engines, and the prospects for overcoming the social deadlock have been increased.

These achievements and positive steps have to be further secured so that the county can have a clear roadmap for the years to come. A final solution on debt relief, based on what has been agreed in July 2015 and May 2016 will unlock positive developments for the country, such as the inclusion of Greece’s bonds into ECB’s quantitative easing program and the progressive access to market funds towards a self-financed model and the exit from extreme fiscal discipline and memoranda.

To that end, the Greek people, the stability of Greece and Eurozone cannot be sacrificed in the name of Mr Schauble’s political and electoral purposes.  

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