Harvard Law School Makes Online Zero-L Course Free for All U.S. Law Schools Due to Coronavirus
For Kennedy School Fellows, Epstein-Linked Donors Present a Moral Dilemma
Tenants Grapple with High Rents and Local Turnover at Asana-Owned Properties
In April, Theft Surged as Cambridge Residents Stayed at Home
The History of Harvard's Commencement, Explained
After their triumph in recent Greek parliamentary elections, the left-wing Syriza party promised either to renegotiate the terms of Greece’s bailout package or to default on debt repayment. New Prime Minister Alexis Tsipras argued that the debt payments and painful austerity program accepted by Greece as a condition of the bailout have harmed growth prospects and harmfully cut the social safety net. Within two weeks, however, Mr. Tsipras retreated, dropping his threat of debt non-payment and promising to find alternate ways of easing his nation’s perilous financial situation.
This is the right step, though it will be painful. Austerity is certainly no joyride, but the reality remains that Greece should and must continue to meet all of its financial obligations.
The burdens on Greece, though nominally imposed by the European Central Bank, the International Monetary Fund, and the European Commission, are the result of decades of profligacy. As a percentage of debt-to-GDP, in 2013, Greece had the world’s third-highest debt levels (by comparison, the United States’s oft-decried debt placed 36th worldwide). Questions still exist about statistics from the late 1990s that the Greek government submitted to meet eurozone admissions criteria. Indeed, the 2008 financial crisis shook Greek financial institutions particularly hard because they were fundamentally weak in the first place—so weak, in fact, that they required the equivalent in euros of over $300 billion in bailout money.
The existence of this enormous lifeline seriously challenges Mr. Tsipras’s narrative of a weak Greece sabotaged by malicious European creditors. The Greek economy was in dire need of help and aid from its neighbors, and what's more, the rest of Europe believed that the exit of Greece from the eurozone would be calamitous for their economies. It was only natural, then, for the European Union to offer a bailout package. But given the Greek government’s past fiscal mismanagement, it was also natural to marry the bailout with conditions of austerity and reform.
While that austerity has exacerbated the human toll of a prolonged recession, these exacting conditions were necessary to both help Greece and prevent future debt crises in that nation. It would have been naïve to view the bailout as a gift of generosity; it was an agreement to provide emergency funds on the condition that Greece enacted economic reforms. Regardless of whether the Greek electorate thinks that the austerity plan is working, the country—after accepting large loans—now has a legal, financial, and moral responsibility to abide by the terms of the original agreement. It is not the obligation of other European governments to create a bailout plan as generous to Greece as possible; it is the obligation of those governments to ensure their citizens’ money is being used responsibly.
In a time of need for Greece, the rest of Europe immediately and decisively came to its aid. The bailout package, while laden with various conditions, was a vital lifeline that prevented a financial implosion in Greece. Having accrued the benefits of a solvent government and financial sector for the past three years, it would be inappropriate and misguided for Syriza to now decide to renege on Greece’s promises. Europe has done its part. Now it’s time for Mr. Tsipras to do his.
Derek K. Choi '18, a Crimson editorial writer, lives in Holworthy Hall.
EDITORS’ NOTE: Occasionally, The Crimson Staff is divided about an opinion we express in a staff editorial. In these cases, dissenting staff members have the opportunity to express their opposition to staff opinion.
Want to keep up with breaking news? Subscribe to our email newsletter.