Editorial: The debt and the cost of suspicion

We may be absorbed by the new decisive clash of the FYROM naming agreement, but over the next two days important developments that will affect our lives over the coming years will be charted out.

By all accounts, at tomorrow’s Eurogroup, beyond the formal completion of the bailout evaluation, measures regarding the Greek debt will be taken, or at least formulated.

The solution naturally is in the hands of our creditors, and especially Germany, which will call the shots as regards how substantial the arrangement will be.

There do not appear to be disagreements on short-term debt relief measures. On medium and long-term debt relief measures, however, the indications are not particularly optimistic.

German Chancellor Angela Merkel may have said after her meeting with French President Emmanuel Macron yesterday that she hopes the last step will be taken towards Greece’s bailout exit, but the terms that will be agreed upon will be decisive in shaping the post-bailout terrain.

There is no doubt that the rules of fiscal supervision will be quite strict, and will be essentially similar to those that would have applied had Athens requested a precautionary credit line.

The measures that will determine the viability of the debt will be of particular importance, both in terms of domestic economic developments and as regards how the markets will perceive them.

Clearly, the objections that have been articulated have to do with the limited trust of our creditors in the domestic political system. They are trying in every way to ensure that Athens does not return to the bad old habits of party rule.

Greeks have already paid very dearly for governmental backpedaling, and it seems we shall have to keep paying for the lack of trust in the political leadership.

Whether we like it or not, our creditors are beset by their own domestic problems, and are determined to avoid confronting a new Greek problem, so they are taking care to prepare for any eventuality.