Multilateralism is not working in Greece. The prevailing standoff between the private-public sector combined and the government threatens to snowball into a wider economic conundrum for the rest of Europe.
While Athens has been holding the bankruptcy peg for long now, how it further sustains is not difficult to estimate. The two-day trade unions strike across the country as Prime Minister George Papandreou urged parliament to back his highly contested austerity package is a telling tale of how recession is unravelling its economy and subsequently imploding into a civil war-like situation.
Greece is in a fix. The tailor-made policies of the international organisations have overwhelmingly drawn criticism from people across all walks of life. In such a scenario, pressing the embattled government to go ahead with the austerity measures that will amount to cutting down of subsidies might be suicidal. Though economic pundits argue that it’s time for tightening the belt and the 28 billion euro programme can make wonders, how practically it could be rolled down remains a mystery.
If the government loses, the European Union and the International Monetary Fund have already hinted that it could lead to suspension of 12 billion euros, and a subsequent insolvency recipe. At the same time, the unrest that is purely economic in essence has already brought the wheel of development and services to a standstill — a bad omen for an already trailing economy.
Greece has to find a middle ground to come back from the brink, and it practically seems to be an impossible task as the parliament too is on the shaky side. The way out for Greece is to enter into bilateral restructuring arrangements, as indicated by Paris, to avoid an imminent default. At the same time it has to revisit its reforms package that it initiated in 2002 as it went the euro way, and indulged in borrowing without an iota of consideration for how and when that will be paid back. That has now squarely come to haunt it.
The country’s banking, insurance, bourses and industrial sectors are in need of structural revamping, and could effectively be bailed out without making them penalise with austerity drives. Nonetheless, this vote due from parl