It’s all Greek to Us

Behind Greece’s economic meltdown is a legacy of bad borrowing and entrenched inertia

by Peter Bjel

The end of Greece’s political and economic turmoil may be within its grasp. The country went through snap elections at the end of this September—for the second time in just nine months—but little headway has been made in solving what has become an intractable economic crisis affecting all sectors of the country. How has Greece wound up in its current social, political, and economic conundrum? The crisis was been a long time coming, but it may be weatherable if systemic complications entrenched in the country itself can be addressed.

Election Number Two

Recent events are the latest in a series of chapters marking Greece’s long fall from E.U. success story. In August this year, Prime Minister Alexis Tsipras’ Syriza party was replaced by a caretaker cabinet until elections could be held at the end of September. Tsipras, freshly endowed with a new economic bailout package from creditors totaling part of a massive €86 billion, resigned early to cement new support for his government. Once a champion of anti-austerity, on which he had won earlier elections in January, Tsipras said he was forced to compromise on this approach given support among Greek citizens for eurozone and E.U. membership. Such a reality could only be maintained by adopting economic solutions proposed by the country’s many creditors.

Instead of calling a confidence vote in parliament, Tsipras opted to win another mandate from the Greek electorate in order to circumnavigate a political rebellion by one-third of his government, which viewed his acceptance of a new three-year bailout in exchange for austerity as a betrayal of Syriza’s philosophy. To voters, Tsipras recalled his earlier electoral victory. “The political mandate of the 25 January elections has exhausted its limits and now the Greek people have to have their say,” he declared. “I want to be honest with you. We did not achieve the agreement we expected before the January elections.”

The current bailout is the third provided to Greece in five years. It is also the harshest, and some analysts believe Tsipras’ resignation was timed to …

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