OpEd: It's time for European leaders to stop playing for time. Taxpayers alone cannot foot the bill for Greece’s debt disaster, and private creditors must quickly become a part of the equation.
BERLIN - General strikes, political conflict, demonstrations—all that Greek drama packs a powerful punch. And the word from Berlin and Brussels until recently has been that without a 100 billion-euro rescue package, the Greek state would be looking at bankruptcy by July. But now, the tune is changing: no need for a rescue operation before September. Until then, Greece will be able to hold its head above water with what remains of the loans it has already received.
This playing for time works to no one's advantage. The new storyline is most likely due to the German government's hope that the current agitated level of German public interest in the Greek situation will eventually die down — push rescue operations down the road a bit, and there will be less fuss when they're wheeled out again. However, in view of rising opposition in Greece itself to Athens' austerity measures, it's becoming ever clearer that the course the European Union (EU) has embarked on is not going to get the job done.
The EU cannot force a cure. Economists in any case doubt that a country indebted to the degree that Greece is can clean up its act without a hardnosed combination of re-scheduling and cancellation. Europe's taxpayers are doing the Greeks no favors by continuing on this course. All they're doing, in fact, is paying spiraling debt service costs. Theater of the absurd, indeed.
Ordinary people in both Germany and Greece sense there's something wrong with this picture. Discontent is rife in the parliaments of both countries, as doubts spread about the ability of Europe's politicians to get this thing under control. It's a bitter blow that the European Central Bank, in the biggest crisis the EU has ever faced, can't step up to the plate to broker a solution.
Because they bowed to political pressure a year ago and accepted Greek junk bonds as securities, sheer self-interest is now making them fight re-scheduling tooth and nail. Were that to happen, the bank itself would face the need for capital injection. And the new head of Germany's federal bank is playing right along: if the central banker had his way, more time would be bought with fresh taxpayer money. But at what absolutely crazy price?
Instead of bungling along from rescue operation to rescue operation, Euroland's politicians should wise up and accept the fact that Greece's debt disaster cannot be put right without letting private creditors in on the act. And instead of wasting precious time, Germany's finance minister should be using it to get out there and fight that fight in Brussels.
Read the original article in German