A new day dawns for Greece - Eurozone crisis

The election of an anti-austerity party to power in Greece may seem at first as if the lunatics have taken over the asylum whereas it could be the very thing to bring sanity to European Union finances. The election result should come as no surprise, considering that more than a quarter of the Greek population is without a job and youth unemployment remains above 50%.

Every EU state needs to take heed of the election result and ensure that everything is done to allow Greece remain within the eurozone.

The euro is already under pressure, lying at an 11-year low against the US dollar and approaching par with the Swiss franc. That is good news for Irish exporters, of course, as it will make their products better value for their customers but it could spell ruin for importers.

Like Ireland, Greece’s most vulnerable citizens have suffered greatest from years of austerity. There is one major difference, though. While Ireland is, at least in part, trading its way out of debt, there is almost no hope that Greece can do the same. Apart from tourism, Greece has few sources of foreign earnings, no major exports and, unlike Ireland, attracts tiny levels of foreign direct investment.

So what it has been doing since the crisis began - at the Troika’s insistence - is to borrow more to pay back more. That’s the madness of its ‘bailout’ programme.

Anti-austerity groups here take solace from the Greek elections and hope it will galvanise the Irish Government to be more robust in their dealings with the European Central Bank and the International Monetary Fund.

Syriza leader and Greece’s new prime minister Alexis Tsipras is in no mood for his country to continue to be bullied by the Troika.

At the same time, German Chancellor Angela Merkel may prefer to see Greece abandon the euro than allow it dictate the entire economic policy of the eurozone.

That means a compromise must be found. At the very least, perpetuating a crisis within the eurozone is not conducive to proper fiscal planning for all its members.

Greek debt levels are unsustainable and will need further restructuring, something, perhaps akin to the Marshall Aid plan which the US extended to Europe after the Second World War. The plan was in operation for four years beginning in April 1948 and Ireland was among the countries that benefitted.

More pertinently, Ms Merkel’s attention should be drawn to the London Debt Agreement of 1953 that settled Germany’s debts from the period between the two world wars and allowed it to re-establish access to international markets. The agreement gave Germany a write-off of 50% of its debts and allowed it postpone payments on the remaining debt until after reunification.

If anyone seriously suggested similar treatment for Ireland, they would be considered a few cent short of a euro, but, surely, forcing nations to endure endless debt is the maddest exercise of all.


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