April 2, 2015
THE REALITY IS THAT hISTORY eNDED:
Greece's Syriza Confronts Reality (Leonid Bershidsky, 4/02/15, Bloomberg View)
The Thessaloniki program was based on a Syriza government's ability to negotiate a partial debt write-off, a temporary moratorium on debt servicing and a link between economic growth and debt service. But the European Union, the European Central Bank and the International Monetary Fund have not agreed to those things, and Greece has had to accept a continuation of the current bailout program, with the creditors periodically reviewing the progress of reforms. Tsipras entered the negotiation unable to walk away from the table, and that quickly eroded his bargaining power. That was the first reality check.Back when Tsipras made his bold election promises, he did not foresee having to act under extreme financial constraints, with funding about to run out almost every day. His government has had to raid social security funds to pay pensions and salaries, and bank runs have made Greece's banking sector desperate for more ECB assistance.The second reality check must have been domestic: The shock of finding out how things really stood from a government's prospective. Like any opposition party in a badly managed, non-transparent country, Syriza had only an approximate idea of the costs and benefits of its proposed measures -- or, indeed, of why previous governments hadn't done all these nice, kind, sensible things for the Greek people. It turns out it wasn't because those governments were just evil and criminal.
Posted by Orrin Judd at April 2, 2015 5:21 PM
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