Greece can still be saved

Prior to this, the Greek parliament put in motion a comprehensive consolidation program to satisfy the terms of international donors despite protests that were at times violent. Since May 2010, 65 billion euros from the package have been paid to the debt-ridden nation. And a decision will soon be made on another 120-billion euro rescue package from the EU. the IMF, and private donors.

The 49 year-old Lambrinidis, who earned a PhD in law from Yale University, was vice president of the European Parliament from 2004 to 2009. His statements focused in large part on causal research. The negative dynamics of the economic crisis and the markets, shrinking productivity, growing debt, and rumors and misjudgments are the principle causes of the current misery — and these are by no means specific to Greece. On July 5, Portugal’s credit rating was downgraded again; Ireland and Spain find themselves in similar situations.

In addition, one fundamental aspect caused problems. Economic divergence between European countries was underestimated from the beginning. Individual economies also featured different structures. The south was dominated by different sectors — tourism, agriculture, and services — than the strongly-industrialized north.

There have also been different forms of growth. In Greece, growth was too heavily based on consumption. The minister particularly acknowledged his country’s mistakes here. But loans become cheap once a country joins the EU. A constantly expanding public sector only made matters worse. That being said, he also admitted that Greece had in the past betrayed its values and given incorrect data.

But now Greece has returned to responsible policies — which were represented and called for by its EU partners. Greece undertook enormous efforts in the past two years to reduce its debt levels and fiscal deficit, according to Lambrinidis, and gave impressive numbers on income reduction and personnel cutbacks. The necessity of structural reform was also recognized by the government. Today, investment is more goal-oriented.

Against this background, Athens’ appeal for European solidarity is legitimate. From the beginning, the currency union has been a collective undertaking. This must also apply to the crisis. Greece stands by the euro that countries like Germany profit from strongly.

Athens supports stronger economic cooperation within the EU. Greece has to benefit from collective expertise and best practices like all other EU members. Imbalances — debts as well as surpluses in export-based economies — need to be detected early. Furthermore, the private sector needs to share more of the economic risks.

As an immediate measure beyond financial aid, the EU is offering technical support for the sale of government property and the modernization of the tax system. In addition, Greece should receive uninterrupted aid from EU structural funds. The ECB, on the other hand, continues to buy Greek government bonds despite the fact that ratings agencies have already downgraded the country’s credit rating a number of times.

Lambrinidis is grateful to Germany and for the federal government’s support. But the minister also protested against unwarranted critiques or even punishment for his country. In 2004, Athens successfully organized the Olympic games and the ensuing praise was effusive. Now the pendulum has swung in the opposite direction. His countrymen have already been punished enough by the economic situation. It is time for both countries to dispel the rampant prejudice felt on both sides.