The Opinion Pages | EDITORIAL
Give Greece Room to Maneuver
By THE EDITORIAL BOARDFEB. 17, 2015
Greece’s lenders, most notably Germany, insist that they are defending important principles: a country must pay its debts, and the long-term success of the euro depends on everyone abiding by the rules.
That might sound fine in principle, but it rejects reality when the country and the euro are at stake, as they are in the negotiations between Greece and the 18 other eurozone governments, which came to a grinding halt on Monday. The dangerous possibility of a Greek default and a crisis in the euro system have become very real.
The immediate issue is an extension of the 240 billion euro bailout, about $273 billion, which expires on Feb. 28. Eurozone finance ministers say Greece must agree to an extension on existing terms and must do so by Friday to give all governments time to approve it. An extension would immediately unlock €7 billion, but the newly elected government of Prime Minister Alexis Tsipras, which was represented at the negotiations by the pugnacious finance minister, Yanis Varoufakis, refused to extend the program and instead is seeking a bridge loan while a new and less punishing bailout is negotiated.
The lenders have declared that if Greece signs on to an extension, a new accord can be promptly reached to soften the austerity terms. Mr. Varoufakis has dismissed such pledges as “nebulous.” The existing program, he said, was “part of the problem, not part of the solution,” and his government was elected to challenge it. From the other side, the German finance minister, Wolfgang Schäuble, accused the Greek government of behaving “pretty irresponsibly.”
Whatever the “troika” of the European Commission, the European Central Bank and the International Monetary Fund thinks it has the right to demand, there is no question that the austerity program has proved to be deeply flawed and has effectively made it impossible for the country to pay off its formidable debt.
Yes, Mr. Tsipras made some hard-to-keep campaign promises, like increasing the minimum wage, reducing taxes or rehiring public employees, and Mr. Varoufakis’s voluble style is not what Brussels is accustomed to. But the Greek leaders have made clear over the past week that they are prepared to keep much of the existing reform program in place, and they have a mandate to wage a real battle against corruption and tax avoidance.
The ideas Greece has reportedly floated in Brussels — like the bridge loan or keeping the primary budget surplus (a surplus excluding interest payments) at the current rate of about 1.5 percent of G.D.P. — deserve more than the brusque dismissal they were given. And if some deadlines need to be moved and some agreements changed, it would not be the first time this happened in Brussels.
However much the eurozone ministers may find it difficult to make concessions to a nation they perceive as profligate and ungrateful, they must come to grips with the fact that cutting Greece some slack now is the only good choice they have.
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