As Carlos Velasco Carballo of the troubled Spanish Kingdom blew the final whistle in their match against the Danes, the Germans booked the date with Greece in the current Euro championships. Saved by the thin margin to make it to the next round as always with their debt rescheduling process, the Greeks will be in the works of the German machine. Angela Merkel, a passionate football fan will be watching this beyond the artistry on the field but will also peer into the marked turf between two nations cobbled into a single economic zone.
While healthy economies such as Norway, Turkey and Finland are missing from the European Party, the Greeks advance into the elite round of the quarterfinals. A clear reminder of early 2000s when nations weighed the benefits of the union bound monetary and fiscal rules but dividing lines of political direction. While the German have adapted sobriety in their outlook and cleverly allow their Mittlestand to use cost advantages to dominate the union and improve competitiveness, the Greek with no shafts and gears spent $4bn to remind themselves of their Athenian ancestry by hosting the Olympics in 2004. Preceded by the euphoria of winning the Euro championships before its Olympian display, the Greek train was on a full horn; its wreckage was never foretold. The Greek books were being boiled till it drew a fine smell of tobacco, hiding the dangerous cancerous sting that now infects other nations in the Eurozone.
After, reworking its fiscal deficit to qualify for Eurozone, bloating its public expenditure, Greece faces dire moments as its debt to GDP ratio reaches 160%. Greece who hid its rags under a sequined dress came to the European party that guaranteed cheap interest rates. The creditors led by European Union and IMF bring the worn-out template – privatize public institutions, cut welfare benefits, reduce social programs and pension funds down in order to pay its debt. In exchange for debt relief, they are asking Greece to walk out naked putting its future in a precarious position. The biggest discourse among global economists is what should Greece do?
In a game where its odds are getting higher either in winning the championship or posting growth after five years of recession what should Greece do? If Greece walks out of the euro, the exports become cheaper but the imports become more expensive. One wonders what tangible will Greece without a robust manufacturing engine export more than tourism which is currently threatened by Dubai, Singapore, Brazil and China of this world. If Greece damns the euro, creditors will swiftly demand immediate settlement of Euro-priced debts; causing a possible run on its banks, disorderly default of debts and the likes of IMF and ECB bringing it relief will quickly shut the door.
It follows the dilemma, should Greece continue to be in the Eurozone whose currency it has no control over and might not be able to sell to competitively? When the Germans over the years have learnt the act of conservative play and high efficiency, what will the Greece do to be at par? The German wages have sluggishly increased over a decade, the Greek producing and selling under same currency can’t match German thrift. As Greece is tossed around by bankers, consortium of private lenders and short sellers, every cure given to them for their short term (how to immediately settle debts through swaps and restructuring ), no one considers the long term prospects of growth for an economy that has been in recession for five years. Now once again not from the economic minefield, they have to eyeball the Germans, pretty well they won’t survive this game. Germany will be reveling in a winner takes all attitude, the sense of nationalism that has not broken the deadlock. One day Greeks will learn a way to live sober on their own and also within their own means. Possibly they should start with this game by walking away and show that they don’t belong to this elite stage of the championship. They should seek a lower rung of football classification that actually befits them.