Opinion: Greece, after its bailout, cannot miss this second chance | European | D.W.

For eight years, the European Union has shown enormous solidarity, and that great achievements are possible, together. The recovery of Greece, despite all the mistakes made and the difficulties that the Greek people had to endure, is a success for the European Union and, in particular, for the countries of the euro zone.

When in 2010 it became clear that the Greek state, due to its excessive deficit, low productivity, high wages and excessive private consumption, was headed for bankruptcy, the European Union and the International Monetary Fund (IMF) decided to help the Greeks. But they weren’t required to do so. The European pacts expressly exclude a “bailout”, that is to say a free rescue of the debt.

Therefore, it was agreed to lend money to Greece on extremely favorable terms so that it could continue to fulfill its obligations, such as paying salaries and state pensions. Of course, the euro zone did not take this measure only out of solidarity, but also out of an interest in preventing the spread of the crisis.

The Eurozone also ensured that German, French and Spanish banks did not fail as they were dragged down by Greece. However, eurozone countries and the IMF could also have heeded the many warnings that saving Greece would never succeed.

Great tenacity, but no alternative

Without such harsh conditions, a financial restructuring of Greece would not have been possible. The state had to drastically reduce its excessive spending. The population has suffered from the drop in income. The economy has contracted. All these difficulties were inevitable, because it was clear that Greece could not continue to exist thanks to loans. In hindsight, however, the cuts could have been made more socially bearable.

The conditions were also necessary, in order to be able to force the execution of the structural reforms that neither the State nor the economy wanted to carry out for decades in Greece. Critics who repeat that savings demanded by creditors have hurt the Greek economy are wrong. Without the restructuring measures, Greece would not have emerged from the serious crisis which was leading it to bankruptcy; it would have been expelled from the euro zone and would today be disconnected from sources of investment and financing.

Bernd Riegert, DW journalist

This was very quickly understood by Alexis Tsipras, the left-wing populist prime minister who now claims to have freed Greece from the yoke of the troika. For several months, Tsipras presented himself, along with the buffoon Yanis Varoufakis, then Minister of Finance, as the rebellious critic of the creditors.

Tsipras brought Greece to the brink of insolvency in 2015. After staring into the abyss, he turned around and enacted even tougher austerity measures. He raised taxes, but at the same time reversed some reforms. In sum, however, Alexis Tsipras has chosen the path of bailing out the euro zone. A fact that now sells as his victory. Why the Greeks believe it remains a mystery.

Doubts over Greece’s strength

The Tsipras and Varoufakis escapades kept Greece in bailout for almost three more years and caused a decline in domestic economic output, which is now picking up again, albeit slowly. A recovery that is taking place, not thanks to the ideas of the government in Athens, but to the well-calibrated rescue plan of the Europeans.

From August 21, Greece must once again be alone in the financial markets and try to borrow money at reasonable interest rates. This can only be possible if any future Greek government applies strong budgetary discipline and improves its competitiveness. Greece and the Greeks earned this second chance with sweat and tears, so it must not be wasted.

The solidarity of Europeans must continue, and it will. The EU has also learned lessons from the Greek crisis. There is now an official bailout fund with sufficient capital. The procedures are already known. The EU is now better prepared for the next crisis. And Brussels will do it again, despite those who, pursuing their own interests, claim the opposite. If populists from Poland to Italy set the tone in the EU, countries like Greece would be lost. With the attitude of “My country first”, Mr. Salvini (Italy) or Mr. Strache (Austria) will surely no longer help the Greeks.

Bernd Riegert (JOV/CP)

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