Greece remains one of the main topics on the European agenda. The government must present its voters with the program of reforms and debt reduction. The aid from European institutions is contingent upon a very detailed agenda. It has been five years now that Greece has been financially supported with a remarkable effort, compared to the effects achieved.
Greece has been brought to its knees by an excess of austerity—at least that’s how the Greeks and some American economists see things. Athens simply did not want to reform and could anyway bounce back through a devaluation and a “Grexit”—at least that’s the opinion of many Germans or economists.
A closer look reveals that several decisions regarding Greece’s bailout plans made sense and were well-intentioned at the time they were made.
The Greek government ignored most structural reforms and focused essentially on fiscal targets, mainly because the governments of donor countries needed tangible results to justify the bailout plan to their voters. And the main priority was the consolidation of the Greek budget.
In Greece, there was the possibility to eliminate many tax loopholes that particularly benefit the wealthy, thus making tax collection more equitable and gaining support during the adaptation period. They did not do this, probably because they feared the well-connected elite and capitulated to interest group lobbies.
The fact is that the EU had long been considering the protection of the rest of the eurozone. The budgetary and debt-related rules remain the course in all scenarios.
It is symptomatic of a certain European arrogance.
