BRUSSELS – The blame game in Europe has not yet begun. An agreement between Greece and its private creditors and public lenders will enable it to meet its next debt repayment deadline of March 20. The Europeans should be commended for a significant step in the direction of realism. Private creditors have accepted a haircut of more than 50% on their claims and a lowering of interest rates, bringing the total debt relief to more than two-thirds.
But, while a solution was found in extremis, many people believe that it will merely postpone the day of reckoning,& as Greece will not implement the promised austerity, and will end up either deciding to exit the eurozone or being pushed out following an eventual default.
Even before the latest deal, political leaders in the Netherlands and Finland, and some in Germany, were wondering aloud why Greece should remain in the euro. In Athens, exasperation has reached new heights, and the bitterness of the disputes has started to echo dangerously the rabid disputes over German reparations of the 1920’s.
“Who lost China?” American strategists asked in the 1950’s, following the victory of Mao Zedong’s communists in 1949. Europeans may well soon start asking themselves the same question about Greece.