Greece essentially went bankrupt in 2009. As soon as the financial problem became apparent it was excluded from the markets and was not it the position to fund itself on its own. The country did no go bankrupt because the European Union and International Monetary Fund accepted, for various reasons, the Greek calls for a rescue.
As such they offered loans and cover to avoid a disorderly bankruptcy and moderate the consequences of such an extreme event in the world economy. In exchange for the assistance, they demanded the implementation of fiscal consolidation measures, so that the country stops creating deficits and new debts.
Their concern was justified. Earlier, in the fall of 2008, the financial crisis emerged and major American banks collapsed, with a the threat of a domino of bank and state collapses in Europe and the rest of the world looming.
As it turned out those, neither the foreign held, nor the measures taken by the subsequent governments turned out capable enough to help Greece overcome the crisis.
A lot of effort has gone into discussing and arguing about the Greek failure. Some blame it to the mix of financial policy and others the IMF’s cruelty; others point towards the Greek political leadership’s lack of understanding and others believes it is a combination of the aforementioned.
All of these explanations may be valid, but one that has not been discussed as much is the most authentic and dominant. Baring a few exceptions, the Greek people and the political class never believed or came to terms with the fact of the bankruptcy.
Most preferred the conspiracy theories and gave into the Sirens of populism, while maintaining the illusion of an effortless return to normality. They rose up and deposed the previous responsible leaders, believed the sorcerers and gradually adopted the fatalistic principle that one “can live in bankruptcy”.
The reason why the crisis has been maintained for so long is down to the fact that no political leadership grabbed the bull by the horns. None of the current political forces accepted the burden of a bankruptcy, none of them told the whole truth the people or assumed the responsibility of outlining the measures and policies that demand effort and sacrifice in order to overcome the crisis.
If the truth had been told from the start and the political leaders took the necessary measures, the country would have long overcome the crisis.
That is a shame though. Six years on and the current leadership is going along the same catastrophic path. It is toying with bankruptcy, attracted by conspiracy theories, fabricating enemies, hounded by the political cost and ultimately stalling and procrastinating, without ever fully assuming the responsibility.
After so many years Greece needs a well read and prepared leadership that is determined to bluntly and without whining assume the burden of the bankruptcy.
Otherwise we will never prosper and the decline will continue…
Antonis Karakousis
Originally published in the Sunday print edition
