The Financial Times have published an article by Wolfgang Münchau who argued that SYRIZA is the only Greek party to offer a convincing case for the restructuring of the Greek debt. Mr. Münchau however notes that while the radical left party may be in the right regarding the debt, it is not being honest when it publicly rules out leaving the Eurozone.
The author reports that the EU and Samaras government policy regarding the debt appears to be based on extending maturities and pretending to be trustworthy, which he considers a failed strategy that only delays the inevitable. Mr. Münchau also argues that the rate of deflation means that the debt is far greater than its nominal value.
Nevertheless, the Financial Times columnist is concerned about SYRIZA’s back up plan, should the negotiations with Greece’s partners and creditors fall through; with SYRIZA having ruled out a departure from the Eurozone, the other option is a return to the status quo – namely the bailout program – which then suggests that there is no point in voting for SYRIZA in the first place.
For the German author SYRIZA may have the right instincts, but it does not necessarily have the correct strategy and this may turn out to be crucial, as Germany appears prepared to call SYRIZA’s bluff. As such, Münchau believes that a departure from the Eurozone may in fact be the only way to restructure the Greek public debt, which he believes is otherwise unfeasible.
