Any credible long-term strategy for Greece must include write-down of crippling debt
Published 07/07/2015 | 02:30
The outcome of the Greek referendum has reanimated democracy within Europe and shattered the trust of voters - and not just those on the left - in the leadership and governance of the eurozone.
The Troika and its political leadership, the Eurogroup, got it wrong, at every level. They had an opportunity back in February to close out the redundant 2012 bailout programme and to negotiate a new arrangement, including up-front debt relief, with Greece. Instead, they chose to patronise the new government. They had the opportunity to engage in trust-building with a government whose politics (and politicians) they did not approve of but who had a mandate from their electorate. They anticipated, instead, that when a government got power, the first thing they would do was to suffer amnesia.
They opted to ratchet up the political pressures, leading to economic collapse, capital flight and a melt-down in the social fabric: the unemployed, pensioners and especially the health system. When Greek Prime Minister Alexis Tsipras referred the jaded 'draft programme' to the people of Greece by way of a referendum, they suggested it (really) should not be happening, then that it could not happen in time and then they inducted their trusty lieutenants - Fear and Power - to say that if it did happen, it would be the end of civilisation as we know it. All wrong.