Europe treading on shifting sands; what now for Greece?

Posted by Antonis D. Papagiannidis 05/12/2016 0 Comment(s) Economia Blog,

For one more time, Greece and the travails of the Greek economy reach the European talking shop - in this case, the Eurogroup - just as "Europe" feels enmeshed in never-ending internal questionings and misgivings. The Italian referendum may well end in novel impasses in the very heart of a founding member; the largely symbolic post of Austrian President of the Republic could well end in an extreme - Right wing candidate. Of course, the Italian tradition of political muddle-through may well reassert itself, while Austrian fears might subside. Still, the feeling that Europe treads on shifting sands becomes ever more present.

 

The fact that this happens just days after French President Francois Hollande throwed in the towel in no way helps. While the overhaul of the German political scene is becoming a game for tough players.

 

What does this conundrum mean for Greece? Well, to start from the December 5 Eurogroup session, the time-honoured practice of kicking the can once more down the road seems to be the option retained. While Commissioner Moscovici and ECB Board Member Coeure were positive in Athens as to the prospects of the current Greek Programme review and the start of some kind off debt-relief discussions, Germany's W. Schaeuble nipped it in the bud by reiterating the mantra of Greece needing only structural reforms to get back its lost competitivity.

 

At the very same time, rumblings from the other side of the Aegean with successive worthies in Ankara voicing border-revisionist intent, along with war games around Greek islands have brought Athens to in fact ask for German Angela Merkel mediation. (In earlier times, it was Washington that had to carry such burdens). The fact that the selfsame "Mutti" has to defuse the refugee/migration crisis simmering with Turkey rather complicates things.

 

There is no easy way out for anybody. Looking from the Greek side of this matrix of problems, the cardinal sin might prove to consider that such European-wide unrest creates better conditions for Greek brinkmanship. The 2015 version should remain a warning for everybody.

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