Greece's current aid package runs out at the end of next year. The hope was that the country would then be able to return to financial markets for financing. The precise amount that Greece might need has not been determined, but the International Monetary Fund in July estimated the sum to be around €11 billion. Greek Finance Minister Yannis Stournaras told Greek broadcaster Skai on Wednesday that the country would need "between €10 and €10.5 billion.''
Such a debt cut, however, would likely have to include public holders of Greek debt, making it politically unpalatable. And the European Central Bank too has said it was unwilling to take losses on its Greek bond holdings. ECB President Mario Draghi reiterated that stance on Thursday, saying simply "no" when asked if his bank would participate in Greek debt relief
Dijsselbloem also indicated that the euro zone may assist Athens by reducing interest rates on the bailout loans it has already received. Many analysts, however, have said that the country's debt load will still be way too high at the end of 2014, with many suggesting that further debt forgiveness is necessary
When the crisis first struck, bringing in the powerful TROIKA of the IMF, ECB and European Commission to enable and control bailouts seemed a necessary temporary measure. Dictating the internal policies of sovereign states can be tolerated in brief time of emergency.
But seven years down the line and with no sign of times changing, EU continued tolerance of the Troika suggests that Europe Union has given up on national democracies and no longer understand democracy’s fundamental principles. The idea that people are sovereign and should be governed transparently by the leaders they elected to enact their will, and whom they can vote out when they fail to do so, seems to have become a naïve utopia.
It is also wrong to assert – as the Troika does – that fiscal sovereignty can be distinguished from “real sovereignty”. A government with no power over how it spends its money is not governing. Creating “mobility schemes” that drive people out of public and private employment, closing down public services and applying comprehensive spending cuts, wiping out all investments in your country’s future: these are the most fundamental of governmental decisions.
The Greek graduates that have moved back in with their parents, the rioters that have stopped rioting because they have lost faith in the ability to create change, the shop owners that have closed their stores, the mother forced to choose between food and schoolbooks; they all understand how ‘real’ fiscal sovereignty is. Somebody needs to tell them that their vote has been outsourced.
If we truly believe that people are incapable and undeserving of governing themselves, we can have the big “technocracy v. democracy“ debate. But this debate has not taken place. Instead democratic rule has been outcast silently. The argument for technocracy is that it achieves better outcomes – it is the rule of good ideas. But the Troika fails by this standard.
The IMF has admitted to miscalculation. The ECB still feels that its primary job is price stability and not restoring economic prosperity. And the Commission quite openly has a “thrifty Swabian housewife“ bias. The Troika’s one big idea, austerity, is the most destructive force to sweep this continent since… you know what.
There is no practical reason the Troika should not be phased out. The money it is distributing is already held by the EU’s own IMF: the European Stability Mechanism. Irrespective of who paid what towards it, the money is meant as a safety net for all Europe’s citizens, and is meant to be spent in good faith, and in the Union’s citizen’s best interests. The unelected Troika’s interventions are destroying Europe country by country and it shows no signs of the solidarity and respect for sovereignty currently needed in Europe.
By Guylain Gustave Moke
World Affairs Analyst
Photo-Credit: AFP-Greek Finance Minister Yannis Stournaras