After ten years of social/political and economic turmoil, an ever-growing threat from Turkey and recent internal tensions over the name dispute with Skopje it is easy to conclude that Greece may be close to passing the point of no return. But once you scratch the surface and look beyond the politics of divide and the extremist rhetoric (both in and outside Greece) is this actually the case?
Improving Economy
The economy of Greece is the 48th largest in the world. After many years of painful economic and structural reforms its seems very likely that the Greek economy may just be turning. The Bank of Greece estimates economic activity to pick up in the medium term, with GDP growing by 2.4 percent in 2018 and 2.5 percent in 2019. The account deficit (that is the measurement of a country's trade where the value of the goods and services it imports exceeds the value of the goods and services it exports) has substantially fallen. Today there is a substantially healthier balance between what Greece imports and exports - indeed according to Bank of Greece governor Yannis Stournaras the current account deficit has effectively being in balance over the last three years.
Recent consecutive credit rating increases and positive outlook by the likes of Standard & Poor's, Fitch and other credit agencies give further credence to the view that Greek economy is recovering. Yes, Greek bonds are still considered non-investment grade speculative however there is a heightened improved global financial sentiment. Only a few weeks ago, Greece was able to issue a new seven-year bond and raise 3 billion euros at a yield of 3.5%. To put this in perspective Greece was able to borrow funds from the international markets at the lowest rate of interest in over 11 years.
The current bailout agreement expires in mid-2018. On a further positive note, there is a consensus by international economic analysts that Greece will not require a new bailout agreement and will be provided with the much-anticipated debt relief – that is always subject to Greece continuing its structural reforms and barring any global economic downturn. To permit a smooth transition to permanent international funding Greece may choose to obtain a precautionary EU credit line. Greece will still be under post bailout supervision regime however it seems that this will be more focused on achieving agreed key performance indicators as opposed to micromanaging how these will be met.
Have these changes adequately trickled down to the public? Absolutely not. However, as long as all Greek governments continue to adopt a reformist approach to the economy, taxation, judiciary, private enterprise and public sector they soon will.
Foreign Policy
Provocations in the Aegean Sea by Turkey are not new. These skirmishes take place daily over many years forcing Greece to spend billions of dollars on military equipment. However, the threat by Turkey is real and increasing. Turkey is nervous and remains deeply insecure especially with its military involvement in Syria. Greece cannot afford to be idle and complacent – both diplomatically and military.
Greece has correctly refused to succumb to the increased polemic rhetoric of Turkish President Erdogan (and Greek trigger-happy warmongers) and has not volunteered to be dragged into a war by escalating tensions in the Aegean Sea. Greece has correctly made it clear to all and sundry that it will not hesitate to defend its borders. It must continue to insist that resolution to disputes should only be achieved by the implementation of United Nations Resolutions, International Conventions, European Acquis and International Law.
Having one large and aggressive neighbour to contend with is more than enough for Greece. A triple front with Turkey, Albania and Skopje is not prudent. Greece is wisely attempting to find inroads to resolve its issues with both Skopje and Albania. It is imperative that these issues be adequately resolved in order to avert Erdogan’s deep-seated strategy of neo-Ottomanism in the Balkans – that is the desire for both Albania and Skopje to become Turkish satellite states. The choice is very clear. Either these states will resolve their issues with Greece and soon enter the European Union or otherwise left in their own devices they may follow the path to Turkey - with substantial security ramifications for Greece. By averting all threats from the north Greece can only win. Greece will be able to solely focus on its problems with Turkey and will upgrade its role as the leading Balkan politico-economic power and bastion of regional stability.
Where to from here?
Not all is doom and gloom. There are positive developments taking place daily. The question remains what do we want? What do we wish to achieve? Are we willing to avoid a race to the bottom that will cause us to disintegrate within an internal misunderstanding and hatred? Do we not realise that the problem with racing to the bottom of the pit is that we may just win such race and remain there? There is a clear choice that we must all make. Maybe we should choose not to see traitors everywhere. Maybe it is wise to ignore the opportunistic rhetoric of hate and political divisions based on yesteryear's politics. Maybe it is time to work towards consensus and harmony and invest in the abilities of the Greek people.
Vasilis Theodosiou Giavris
(Lawyer & Political Scientist)
