Dimitris Rapidis

These last days we have witnessed a growing “statement war” over the possible outcome of the negotiations in this Wednesday’s Eurogroup and the possibility of “Grexit”. This term that has been so easily used in unofficial statements and media coverage to stir anxiety in the markets and fear in the Greek and European public is coming over and over in the table. In a previous analysis we have explained why Grexit is an artificial dilemma and not a possible scenario. Still, both EU and Greek media, as well as officials from third party organizations continue to “play” with the term Grexit, always in the most counter-productive way.

What Eurozone leaders hesitate to unveil is that there is no plan for Grexit. In this respect, there is no plan on how this process will be reached, as Eurozone leaders do not make their voice clear on the next steps. In fact, EMU does not predict any exit for any member-state, nor it predicts the “day after” for the member-state that decides to abandon the monetary union voluntarily. Greece, as any other Eurozone member-state, has the institutional advantage to insist in both levels: first, to suggest another economic model for Eurozone, especially when observed that a given economic policy (i.e. austerity) is devastating for a number of member-states; second, to exploit the right of being member of Eurozone, and therefore get stuck in the neck of Eurozone and the ECB. The latter also justifies why the ECB decides to unilaterally exempt Greek bonds from quantitative easing (i.e. at this stage) while giving the “green light” to resort to ELA for “cases of emergency” as the one we are going through.

In a similar degree, the stance of Eurozone’s leaders is hypocritical in the sense that political leaders still distance themselves from the program and the intentions of the Greek government a couple of days before the first round of negotiations. Portugal, Spain, Italy, France, Ireland, and Cyprus (i.e. including Greece) are the member-states of Eurozone that face mounting burdens in getting along with austerity and debt management. This group of member-states constitute over 35% of the the total number of Eurozone member-states, with Italy, France and Spain considered to be major economies with, respectively and comparatively, much higher economic struggles than Greece. The first four, while unofficially sympathizing with Greece’s firm stance, hesitate to support the Greek government clearly and officially. In other words, in this endless “game of shadows“, Greece might well bring the negotiations in its own field and achieve at least a compromise for Eurozone. This is the best possible scenario for Eurozone, and Germany, that still see the tree and misses the forest.

To sum up: The Greek government has every right to negotiate over better terms for itself and for Eurozone. Should Eurozone misses to understand that the current economic policy is devastating short-term, mid-term, and long-term for Eurozone, then Eurozone will inevitably split apart in the coming years (i.e. with or without Greece). Eurozone’s deadlock is a political deadlock, and not an economic deadlock.

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