Saturday, March 21, 2015

The Greece Issue Breeds Brinkmanship in the Eurozone

New York Times
March 20, 2015

Nobody expected that the discussions between Greece and the rest of the eurozone about a new loan agreement would go smoothly. But things seem to be going even worse than expected, with both sides sniping at each other and refusing to engage in meaningful negotiations.

Last month, Greece and its lenders — the 18 other countries that use the euro, the European Central Bank and the International Monetary Fund — agreed to extend a 240 billion euro (about $260 billion) bailout program for four months while they worked on a permanent deal. The hope was that during this time, Greece would start making changes like improving tax collection and reducing senseless regulations that make it hard to do business in the country. In exchange, Greece’s creditors would give it more leeway in how and when it paid back its loans.

But with debt repayments coming due, and fears mounting about a possible Greek default and exit from the euro, both sides seemed more eager to annoy each other than to grapple with fundamental issues. Greece’s prime minister, Alexis Tsipras, has been demanding German reparations for World War II, which seems almost beside the point. The German finance minister, Wolfgang Schäuble, has antagonized Greece with some name-calling, describing its finance minister as naïve.


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