Monday, March 27, 2023
 
 

Referendum Notes: To salvage the Greek economy, aren’t we really down to #Alexit or #Grexit?

- Advertisement -

With the Greek economy in free-fall less than 48 hours before Syriza’s snap referendum begins, it is getting difficult to separate the reams of economic collapse reports coming in from something that would have considered a nightmare or even a hallucination just a month ago. On the fifth day of capital controls the news is all about cascading cash shortages in the domestic market and empty ATMs, import credit cut-offs, tourist cancellations, fuel supply problems and the beginning of devastating supply chain disruptions.
Consider this header in a recent CNN Online article. “The Greek prime minister is bad for business.” Wasn’t this the battle cry of the now-out-of-power former New Democracy/Pasok coalition in the January elections? Of course what they were talking about then was the expectation that Syriza would block privatization plans, destroy business confidence and scare off investors, raise taxes sharply, increase regulation via a reflated public sector, and cool relations with Greece’s key trading partners and of course its creditors. That list seems like a brief snow flurry compared to what Greece has witnessed in the last several days.
Who blew the bottom out of the ship? Completed before the capital controls, the IMF Debt Sustainability Analysis (DSA) that surfaced yesterday pulls no punches on this score: http://www.imf.org/external/pubs/ft/scr/2015/cr15165.pdf. The key conclusion is fairly simple, before the January 2015 election, Greece was on a clear but difficult path to debt sustainability. Everything changed after Syriza arrived, but most important was the obliteration of all of 2015 as a year of reform, recovery and growth (IMF estimates zero GDP growth now which may turn out to be optimistic). Accordingly a follow-on program previously thought to be small change, around 20 billion euros, has now swollen to an estimated 52 billion Euros in additional support over the next three years.
In light of the poisoned relationship between Syriza, the IMF and most of the European Union, a financing package of this magnitude without #Alexit and a more reform-oriented Greek government seems unattainable. But the next days will clearly enlighten us.

- Advertisement -

Subscribe to our newsletter

Co-founder and Executive Director for Global Economics and Southeast Europe at NE Global Media.  Former US diplomat with previous assignments in Eastern Europe, the UN, SE Asia, Greece, across the Balkans, as well as Washington DC.

Latest

Africa’s porous borders promote transnational crimes rather than deeper integration

For positive continental regimes to succeed, there must be both conscious and concerted efforts, as well as political will, from all states to help eliminate transnational crimes while fostering integration across the whole of Africa through trade.

Kazakhstan’s new parliament could usher in green energy, rare earth investments

Kazakhstan held internationally monitored elections for the Mazhilis, the...

EU-Turkey earthquake relief conference: Time to get serious

The European Union is hosting a reconstruction conference in...

Cambodia’s current government is the face of tropical Fascism

There is no hope that the authoritarianism that the world sees in places like Russia, China and Cambodia can ever be interpreted as a peaceful and benign phenomenon, or that it should be accepted by an implicit racist or discriminatory assumption that some cultures just don’t have a democratic tradition and aren’t quite capable of ever developing one.

Don't miss

Africa’s porous borders promote transnational crimes rather than deeper integration

For positive continental regimes to succeed, there must be both conscious and concerted efforts, as well as political will, from all states to help eliminate transnational crimes while fostering integration across the whole of Africa through trade.

Kazakhstan’s new parliament could usher in green energy, rare earth investments

Kazakhstan held internationally monitored elections for the Mazhilis, the...

EU-Turkey earthquake relief conference: Time to get serious

The European Union is hosting a reconstruction conference in...

Cambodia’s current government is the face of tropical Fascism

There is no hope that the authoritarianism that the world sees in places like Russia, China and Cambodia can ever be interpreted as a peaceful and benign phenomenon, or that it should be accepted by an implicit racist or discriminatory assumption that some cultures just don’t have a democratic tradition and aren’t quite capable of ever developing one.

Energy supply diversification out of Russia’s orbit is a top priority for Bulgaria

Bulgaria intends to diversify its energy resources, including supplying...

Sanctions, sanctions everywhere

On February 24, 2023, the US Government alongside G-7 leaders announced via a White House statement a new set of trade and economic measures...

Eclipsed by Ukraine concerns, Blinken visits Turkey and Greece

After attending the Munich Security Conference on February on 17-19, US Secretary of State Antony Blinken departed for a brief regional mission to Turkey...

US & Philippines agree to ramp up defense cooperation

The US and Philippines announced on February 2 a substantial expansion of their existing military cooperation arrangements, increasing the number of facilities that American...

Bulgaria again heads towards elections

Bulgaria is now moving towards its fifth parliamentary election in two years as a result of the failure of the latest group of elected...

Croatia advances to the EU mainstream

 Croatia took a decisive step January 1 towards the mainstream of the European project by adopting the Euro as its currency while at the...

EU Tirana Summit: Enlargement must go on

The summit's generic one size fits all “membership perspective” statement was seen as good news by most after the topic of EU Enlargement had become a highly controversial subject.

Miami morphs into a global business hub, can it last?

Due to Florida’s less stringent COVID restrictions, a political strategy driven by the state’s Republican governor, Florida became a vastly more attractive location for individuals able to work remotely.

Washington sanctions BiH officials undermining Dayton Agreement

On October 3, the US Department of State announced the designation of two individuals and one commercial entity in Bosnia and Herzegovina (BiH) for...