By THE EDITORIAL BOARD
JUNE 1, 2017
The New York Times
For nearly a decade, Greece has struggled under suffocating debt, which now totals more than 300 billion euros ($338 billion), or nearly double its annual economic output. Waves of austerity measures to satisfy creditors have inflicted great suffering: More than a quarter of Greeks are unemployed, and vital services, like health care and transportation, are running as bare-bones operations. The economy is in recession, and there is virtually no way Greece can dig itself out of such a deep hole.
On May 18, Greece’s Parliament dutifully passed a fresh round of austerity measures, including tax increases and new cuts to pensions. Yet, Greece’s creditors met in Brussels last week and shamefully failed to agree on terms that would permit the release of 7 billion euros in bailout funds needed by July to keep Greece from defaulting.
Much of the blame goes to Wolfgang Schäuble, Germany’s finance minister and a member of Chancellor Angela Merkel’s Christian Democrats party. Mr. Schäuble opposes debt relief for Greece — as do many German voters, who will head to the polls in September.
Some in Germany have come around to reality. “Greece has always been promised debt relief when its reforms are implemented,” Foreign Minister Sigmar Gabriel, a member of the Social Democrats, said on May 22. “Now we must stand by that promise.”
France’s new president, Emmanuel Macron, expressed his support for relief in a telephone call to the Greek prime minister, Alexis Tsipras, last week.
Europe’s finance ministers hope to have an agreement after they meet on June 15. The main sticking points are the terms under which the International Monetary Fund would rejoin the bailout effort and how far Germany will bend.
A failure to do so would be catastrophic for Greece and an unconscionable stain on Germany, whose stubbornness is costing Greece the only durable solution to its woes: economic recovery.