From Grexit to Grecovery: The Paradox of the Troika's Engagement with Greece

Abstract

Locked in the commitments of previous governments and arrangements negotiated with the Troika back in 2010 and early 2012, the Greek government continues to channel the burden of fiscal adjustment towards the private sector, killing any nascent thoughts of investment and entrepreneurship in Greece. Simultaneously, bold structural reforms are kept hostage to the uncertain balance of the ruling coalition and negligible majority in the Greek parliament. Caught literally between a rock and a hard place, the authorities seek to attain a primary fiscal surplus, hopeful that this will help to bring an end to the essentially faulty economic adjustment programme for Greece in 2014. Surprisingly, the talk of fiscal surplus alone seems to have ignited positive expectations that the crisis might, in fact, be nearing an end. This suggests that in the same way as the crisis in Greece was provoked by irresponsible and inaccurate statements about Greece's fiscal position and Grexit was a viable option through 2011, discourses on Grecovery may prove constitutive of the end of the crisis. This paper explores this issue and by so doing contemplates the evolving nature of the core-periphery relations in the EU and its policy-making.

Key words:

• Greece
• sovereign-debt crisis
• Troika
• EU
• Eurozone

Notes

1 To be specific, ‘Grecovery’ is a term employed for the first time by Antonis Samaras in his speech delivered in Helsinki in 2013 at the Economic Ideas Forum organised by the Centre of European Studies, where he stated ‘Now, we are talking about Grecovery, not about Grexit’. In an interview for the Helsingin Sanoat on this occasion, Samaras argued that

We worked hard to restore the credibility of our country, to reverse the fears of Greece's exit from the eurozone to consolidate its membership in it. From month to month, we strive to meet the fiscal adjustment objectives, we reduce the deficit, implement structural reforms and turn Greece into an investment-friendly country. (Samaras, 2013)

2 Today, Papakonstantinou faces criminal charges on account of suspected infidelity in service, falsification of document as well as breach of duty. See: AMNA (2014) ‘Time limit for former minister Papakonstantinou's offences has not expired’, AMNA, 12 January 2014, at: http://www.amna.gr/english/articleview.php?id=4748

3 I.e. the author's interviews with high-profile experts and decision-makers that consented for the interview on the condition of their anonymity preserved. The interviews took place in Athens, Washington and Brussels over the period 2010–2013.

4 I.e. the author's interviews with high-profile experts and decision-makers that consented for the interview on the condition of their anonymity preserved. The interviews took place in Athens, Washington and Brussels over the period 2010–2013.