So, we’re back from the brink! well, for a couple of days at least, lets wait to see what Monday brings.
Just a quick blog post on my musings…..
So the headlines are the greek government wants to reduce its debt by circa 30% and renegotiate not he austerity measures, Europe, being led by Germany in this case, on the other hand is not so keen. The result is we’ve had some tense days until yesterday when each side seemed to reach a temporary agreement, a 4 month extension (pending some detail to be agreed on Monday).
I thought the solution was easy:, here are my thoughts and I am on the side of Greece staying within he Euro and EU:
1. I was taught you always have to pay your debts (obviously better not to get into debt in the first place but thats unrealistic for most of us!). So, the debt stays and must be paid back.
2. Extend the payment plan and reduce interest payments. This buys more time and stability for Greece.
3. Agree measures to rebuild the economy but let the Greek government implement those plans and build in some flexibility pending any macro economic changes. The Troika should not dictate policy to the Greek parliament.
4. Greece has to make certain payments in line with point 2 above.
5. Any material default and I am afraid all bets are off!
Am I out of line with this? is there something fundamentally wrong with the plan that I am missing? Maybe. Probably.
Whats also been interesting is how the personalities of those involved are materially shaping negotiations. It’s interesting to me that emotion seems to becoming involved in negotiations and the speed at which progress is being made. One would think that ministers must be pragmatic and leave all emotion to one side. Easier said than done. It seems the Greek and German finance ministers aren’t the best of friends and no doubt the tension created here has made negotiations more difficult. To me, this highlights the value of good relationships. Good relationships enable speedier agreements and make it easier to discuss any difficult topics. All good.
Relationships take time to build so it comes as no surprise there is little trust between the respective finance ministers of Greece and Germany as the Greek government is new and most likely not had any time to build relationships before addressing the current tricky negotiations.