Six nations came together in 1957 to create the European Economic...
Greece’s dire situation continues to grab the headlines. A third bail out was agreed in principle this week, subject to the approval of the Greek Parliament and Eurozone leaders.
There were riots in Athens as their Parliament confirmed the package. This involves a ‘growth package’ of €86 billion (£61 billion). The deal is dependent on major reforms in Greece; €25 billion will be provided to recapitalise Greek banks that have been closed for several weeks, creating havoc for business and individual customers.
There are real fears that this deal is insufficient to solve Greece’s problems. The IMF, one of Greece’s creditors, insists that it cannot contribute to the package unless there is serious rescheduling of Greece’s debt. Before it can lend any more, its rules require evidence that Greece’s debt is sustainable and there is the prospect that it can return to the private bond market for financing.
Rescheduling Greek debt is opposed by Germany, and some other Eurozone members, but supported by the French. The German position is unrealistic because there is no likelihood of Greece repaying them in the short term and none at all if they are forced out of the Eurozone. The Germans might also recall that their post-war debts were written off in 1953.
In my opinion, the third bail out is no more than a political sticking plaster, intended to show that Europe is capable of solving a crisis that has menaced the Eurozone for several years, but it is not a long term solution to Greece’s problems. They owe at least €320 billion, which is 177% of their GDP. A quarter of Greeks are unemployed and the increased austerity called for will damage the prospects of economic recovery and make life unbearable for the poor and vulnerable. Moreover, the money lent to Greece will go back to Germany and other wealthier countries in debt repayment. To ask Greece to operate on the same economic values and priorities as Germany is totally unrealistic but that is the flaw in the nature of the Eurozone. How long will it be before other deeply indebted members succumb to the same problems?
How long will it be before other deeply indebted members succumb to the same problems?
A Christian reflection on this situation would ponder Jesus’ teaching in Luke 6:
“If you lend to those from whom you expect repayment, what credit is that to you? Even ‘sinners’ lend to ‘sinners’ expecting to be repaid in full. But love your enemies, do good to them and lend to them without expecting to get anything back.”
Before that is dismissed as impractical it is worth noting from Acts 2 and 4 that that is how the early Christians operated in their community life. St Paul set a rule in Thessalonica “if a man will not work, he shall not eat”, but he assumed that everyone could work if they chose to do so and that is not universally true in Greece. Of course capitalism works to a different set of values but the Greek situation calls those values into question.
Whatever our position in that debate the need to pray for the Greek people, its leaders and its most needy citizens, as well as the Eurozone leaders, is crucial.