Preparatory phases. Greece's woes are an example of the difficulties EU countries have in living alongside each other if they don't all stick to the common rules. However, it's not yet decision time; we are still in the preparatory phase. The question as to whether a eurozone country can leave it and under what conditions remains open and opinion is, furthermore, highly divided on the issue: some say that membership of the euro is irrevocable and others argue that a departure from it is an automatic consequence for the countries which fail to abide by its rules. A third group is firmly convinced that the countries in question would have to leave the EU altogether (see EUROPE 11223). However, the time is not yet ripe for the major legal and institutional debate; currently, the dialogue is more limited, concentrating on the elections in Greece of 25 January: most of the member states hope that these are won by the traditional political parties and not by the extreme left, represented by the Syriza party of Alexis Tsipras.
Syriza rejects the policy of austerity out of hand. The latest opinion polls give it 29.5% of the voting intentions, slightly ahead of the New Democracy party of Prime Minister Antonis Samaras.
Understandable concerns. Alexis Tsipras has announced his intentions - if he wins the elections and is able to form a government, he will reject the austerity policy stemming from the commitments taken by his country to the EU. However, for both political and economic reasons, the EU is not in a position to deal with this situation. If Greece fails once again to stick to its commitments, the consequences would be severe, most of all for the eurozone countries currently emerging from situations similar to that of Greece.
Difficulties on both sides. The situation in Greece is a dramatic one, but it may also be dramatic for its donors. Over in Greece, Syriza stresses that a quarter of the population no longer has any social security coverage, that the public hospitals are overrun and their budgets overstretched, and that tuberculosis and malaria have made a comeback.
In the opposite corner, a number of countries whose public accounts are already in the red have had to increase their debt in order to lend to Greece. Admittedly, the beneficiaries of these operations are, in some cases, banks (although previously, they have at times been obliged to write off some of their lending), but the national budgets are suffering from this in any case.
It's worth a quick reminder of what aid to Greece has cost each of the biggest eurozone states, to the nearest billion euros: Germany 56; France 42; Italy 37; Spain 24. It is also noteworthy that the IMF has “suspended its payments (to Athens) pending clarification of the situation”, which is entirely understandable.
Optimism on heavy terms? Despite all of this, quite a few observers are basically optimistic. They feel that economic recovery in Greece is underway and that the efforts made are starting to bear fruit. However, the list of improvements still needed is long: an end to corruption within the State; further reforms; the tax service to get more serious about collecting tax; more efficient administration; re-negotiation with foreign creditors; support to the less-favoured social classes. These, obviously, are not objectives that can be achieved overnight, but these are the only conditions under which Greece will be able to hold onto the single currency. Unfortunately, the impression that Athens will never succeed in meeting the requirements to stay in the eurozone is gaining more and more traction, although the details of a theoretical Grexit are not yet known. Even Dr Merkel continues to reaffirm that Greek's membership of the euro is not up for discussion, but she is not alone at head of state level in hoping that Syriza does not win the forthcoming elections. And even if it does not, that will not solve the underlying issues. (FR)