Syriza's Poisoned Chalice
Even before they came to power, the mainstream media was working hard to create the impression that if Syriza was elected to power, it would be the financial and economic kiss of death for Greece with no hope of resolving the Greek economic crisis.
In my opinion the €240bn financial rescue package arranged in 2010 set the stage for a major financial day of reckoning in Greece, it was only a question of time, and that day of reckoning has arrived.
Syriza had more than just a poisoned chalice to cope with, insofar as its mandate from the electorate effectively called for Greece to remain in the euro, whilst seeking an appreciable easing of the austerity measures.
A tall order!
The reality of the matter is that the Greek sovereign debt levels are simply far too large for the country to service.
If Greece is to have any realistic chance of meeting its interest and principal loan repayment obligations, the overall debt levels would have to be written down (reduced) substantially, which would involve holders of that debt to suffering losses, which include the ECB, IMF, several international banks and governments.
The only way Syriza had any chance of fulfilling its election mandate, was to push the EU hard, right from the beginning. He would have to point out the obvious and conveniently ignored fact, that Greece is in effect a bankrupt state!
Tsipras (prime minister) and Varoufakis (finance minister) made it abundantly clear to the EU, that under the Greek economic crisis, Greece was simply incapable of meeting its current loan and interest repayment commitments.
They demanded that an agreement should be reached to make a substantial write down (reduction) of the amount of outstanding Greek debt, so as to reduce it to a genuinely sustainable level. Under the circumstances what else could Tsipras and Varoufakis do?
The aggressive stance adopted by both Tsipras and Varoufakis on the Greek economic crisis, appeared to have taken the EU leaders completely by surprise.
The EU leaders realised that if they agreed to Syriza's request to undertake a substantial write down of Greek sovereign debt, that similar requests would be quickly forthcoming from other Eurozone countries in difficulties.
As far as the EU leaders were concerned, the only way to deal with the Greek request was to stonewall Syriza and buy time, knowing full well that Greece was rapidly running out of money which, out of necessity, would force Syriza to accept the EU and the Troika's terms.
That is, unless Greece finds a new array of funds and friends from the East...
Article by: James S Gibson
Date of article: 30 May 2015
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