Monday, July 13, 2015

A deal that is costly both for Greece and Europe

Financial Times
July 13, 2015

In the early hours of Monday, Greece and the eurozone stepped back from the brink. Faced with the imminence of Grexit and all its uncertainties, they signed up to a plan that might shore up the crumbling Greek economy and open the door to another bailout deal.

The pact offers no respite from the agonising cycle of negotiation that has dominated the crisis. The proposal agreed to by Alexis Tsipras and the other eurozone leaders merely sets yet another deadline, along with the conditions Athens must meet to avert disaster. The Greek parliament and public will now have their say on the proposal, along with those in other eurozone states. Given the severity of the terms and the fissile state of public opinion, its acceptance cannot be assured.

Even if the deal succeeds in restoring some stability to the shattered Hellenic state, the experience of recent days has been a searing one — not just for Mr Tsipras but for the entire eurozone.

Germany’s approach has left deep scars, enforcing harsh terms on the hapless Greeks and exposing divisions with other more conciliatory voices such as France. Berlin’s rigid stance raises questions about the functioning of the eurozone and the compatibility of Greece’s dire situation with democracy. It prompts deeper concerns about the future of the EU project itself.


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