Greece must continue to wait for the next bailout package. Eurozone finance ministers now need to put their cards on the table after failing to reach an agreement, says Henrik Böhme.
I've stopped counting. For nearly three years, the club of euro countries has been trying to prop up its problem child and put him back on his feet. Week after week of decision-making has come and gone with no decisions except for one - the first debt "haircut" in spring that eased Athens' financial burdens by 100 billion euros ($128 billion). Since then, the parties have continued to play poker, defer to the next EU summit or refer to the missing Troika report - or to the day that never comes.
That's what happened on Tuesday (20.11.2012). The eurozone finance ministers had repeatedly referred to their meeting on November 21. Earlier in the week, Germany's top cash-keeper, Finance Minister Wolfgang Schäuble, said everyone was working hard on the issues and needed to find a solution for Greece by then. But no solution was found. The situation remains as complicated as ever. So adjourn the decision to another week? Hardly. Everyone will continue to muddle along.
Europe has chosen to keep Greece in the eurozone, despite the fact that the bare economic facts show the country is a bottomless pit, and possibly without walls. Yes, the Greek government has delivered another billion-euro austerity package and additional severe spending cuts to many people on the Aegean Sea. Yet the economy is not rebounding, precisely because of the austerity measures. It continues to sink deeper and deeper, while its mountain of debt grows higher and higher.
Now, after almost three years of fruitless help in the way of guarantees and loans, with money and interest rates moving back and forth, it looks as if the dream of rescuing Greece with these measures has vanished. It's finally time for European politicians to tell voters, "Sorry, we've tried, but if we really want to help Greece, then we need to pay a price now." The question is: How many billions to spend on which option: another haircut or an exit from the eurozone? No one can accurately put a number on the true cost, nor estimate the consequences of such a decision on the rest of Europe and the world economy.
It's good that the International Monetary Fund, as one of the lenders, is now showing some resistance and declaring it no longer wants to participate in the group's beating around the bush. The IMF has an important principle that it doesn't want to break because of Greece - emergency loans should only go to those countries that are able to pay them back. Politicians must accept this, especially those in Berlin who have stuck out with their refusal tactics.
That was an issue before the first haircut, and the lies and delaying tactics today are only preventing a real solution. It's frightening to hear people say we need to keep Greece alive until German elections next year. That will backfire for the Chancellor. Angela Merkel still has an opportunity to tell her people the truth.