This is not sustainable

28 September 2016
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Greece’s international partners and creditors are aware of the fact that they have imposed a recipe to bring the country out of its economic crisis that simply doesn’t work.

The absurdly high taxes and social security contributions constitute nothing more than a dead end. The country’s creditors must realize that this model can only end in tragedy. Most likely they simply don’t really care, because what is most important to them is that the numbers add up on paper and that a new Greek crisis is avoided until the end of national elections in major European countries.

Greece’s lenders also know that, the way things stand right now, the government has absolutely no appetite to curb public spending. They are basically giving us just enough rope to hang ourselves.

Besides, I have always suspected that German Finance Minister Wolfgang Schaeuble saw this policy mix as a likely misguided strategy that would in fact serve his own objective – that of Greece voluntarily exiting the eurozone. I can imagine him thinking to himself two summers ago: “Shall we give them more taxes? Yes, let’s add some more.”

Meanwhile, a plan targeting hundreds of thousands of taxpayers is now under way. These days it is hard to support a pragmatic idea that goes against the mainstream. However, there is a thin line between, on the one hand, insisting that one sticks to the rules and, on the other, carrying out a ruthless hunt that will simply destroy what is left of the real economy.

It’s already been a few years since the first international bailout agreement, but Greece has still not hammered out a national plan to exit its financial crisis. We are heading toward the wall at full speed. The fact is that some of the country’s international lenders appear far too wrapped up in their own obsessions and, most importantly, they no longer care.

At the moment, there is no convincing proposal as to how Greece can possibly pull itself out of the vicious cycle it is caught up in. The average citizen is worried that the process of rapid pauperization will continue and that the fiscal straitjacket will remain in place.

The coming months will be crucial. The major risk is that of a worn-down society being lured by the sirens of populism putting forward simple yet radical solutions. A growing number of people out there are saying, “This is not sustainable.”

It makes one wonder that the audience drawn by the second generation of populists in the age of memorandums is not bigger than it actually is.

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