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Euro-Greece Debt Crisis--Is there an alternative plan ?

By       Message Stavros Tasiopoulos     Permalink
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Much is being said about the real choices that ultimately has the current government, let alone a new government, with the party of Syriza as the main trunk of her. What is true and binding on Greece from its participation in the Euro zone, unfortunately although four years in memorandum, has not been clear not only to citizens but possibly in political parties and politicians.

The Treaty on Stability, Coordination and Governance in Economic and Monetary Union in force from 1/1/2013 in conjunction with Regulation 472/2013 of the European Parliament and Council provides the context in which it occurred to strengthen the monetary union in the EU.

Therefor, it is a direction where each member state should examine whether they can meet these commitments or they choose to lead off the treaties, an autonomous monetary course.

However this treaty has to be consistent with the Law of the EU and what the EU Treaties define, something that relies on: Treaty on Stability, Coordination and Governance in Economic and Monetary Union, article 2 (Consistency and relationship to the law of the Union)

Nowadays the main issue is the relationship between the Law of Treaties of the EU and the decisions on monetary and fiscal policies of the member states of the eurozone. Which way and on what basis the countries of EU and Eurozone decide in accordance with the statutory conditions and whether exists an institutionalized automation of valid decisions to specifically directed policy followed by the member states.

Today among a dozen of scenarios, more realistic seems to be this revision of the treaties of the EU in a direction relaxation of fiscal stringency and strengthen solidarity between member beyond the logic of the European Social Fund. A review of the issues where deficits and debt will be treated as yet another social issue that the EU is asked to solve on the axis of cohesion policy, as it does for all individual issues of policies.

This perspective, although it's not considered to be written off, now has little chance of implemention, something that emerges from the results of the European elections. Although the power of Eurosceptics (left and right) increased, the dominant forces of the Christian Democrats, Socialists and Liberals remained in a status they had before, Crisis. To expect a shift in policy and even more a revision of the EU treaty and the treaties governing the euro zone, it's probably not feasible.

Hence the discussions even in countries of North Europe about the prospects of a relaxation of the austerity policies tend to formulating an attempt for alternative plans based on the documentation of failure to fulfill the objectives set by the EMU and the ECB. Levered the economic analysis and social situation, in countries that implemented memorandum and especially in Greece, this attempt aims to defeat existing policies.

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But every country and also the ECB itself has the right to process alternative plans. For Greece the Plan B, is not necessarily a return to the national currency, but the beginning of a great debate within the Economic Monetary Union for the fate of a member-state, which, despite cooperation programs and financial assistance, finds it terribly difficult to move forward. The start and the result of this diplomatic, political, financial negotiation trading from the outset is an alternative to the current status with the signed commitments being kept.

The alternative plan does not automatically lead to the exit from the Eurozone, but means to default, if not all, at least most of the commitments arising from participation in it. The refusal of the country would lead the European Central Bank to send it outside of programming, in principle. From this point until a return to the national currency it would start a huge round of diplomatic contacts and this does not necessarily mean the withdrawal of Greece from EMU.

It can also mean a special relationship to a timetable of recovery while reducing the debt, but it can also mean the exit from the common path of the euro and the establishment of a special connected relationship, similar to the one required for a country-member of the EU to join the Eurozone.

The'' extortion'' of the country to Eurozone for a different course would have been likely to succeed, only if the country seemed to have been in orbit for implementing strict fiscal policies for the deficits and the public debt, something that would lead (?) partners in a brave haircut such as 50% or even more. But these movements presuppose that there is a majority proposal within the country that beyond any electoral process would involve conducting a referendum after the primary round of negotiations of the new government.

And that is because the failure to obtain the concord of the large part of society could cause more unrest and glitches to democracy than the period of the voting in Parliament for the memoranda.

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And if and when there is an explicit mandate from the people to the government to move forward outside the programming of the Eurozone, then the way back in the national currency and the establishment of an autonomous fiscal policy would cut only the attitude and the decision of the ECB, EMU and the EU.

If it would accept the'' blackmail'' and that would mean adjusting the programming, if it would go for a special relationship with Greece, if it would set the framework for a connected relationship similar to states seeking participation in EMU and at the end in the most negative way, it would expressly refuse the Greek counterproposal.

So if we want to speak honestly, none YES to all exits nor NO to all. However a polarized political system and the dependence of any decision from serving political parties and any other interests, don't render any government in the best place for negotiations. Finally the Greek answer to a possible denial of the Eurozone, must be depended on the people's verdict because the people after been informed for all the real data must have the final word. So that no one has then to say that he didn't knew or he wasn't asked.

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Euro-Greece Debt Crisis--Is there an alternative plan ?