10:11 18 July
10:08 18 July

Expectations arising from a default in Greece - ANALYSIS

Dean of the Azerbaijan University of Languages, Anar Nagiyev specifically for the Analytical Center of the APA.

The first half of 2015 year was full of important events. Among them are the economic crises in Greece, located on the southern edge of the European Union and is considered the cradle of the ancient democratic civilization. The crisis has led to the problem of financial dependence, which has gone beyond its economic performance.


The economic and financial problems observed in the country since the beginning of the 21st century, forced it in 2010 and 2012, the years take credit assistance from the IMF, European Central Bank and the European Commission. Currently, Greece's debt to international financial institutions exceeds 240 billion euros, is 180% of GDP.


This is the highest figure among the 19 member countries of the Euro zone. In such circumstances, the salvation of the economy, the protection of the international prestige of the country has become a top priority for modern Greek society. In order to bring the country out of this situation on the Greek elections in January 2015, expressed confidence in leftist parties Siriza.


The new prime minister, Alexis Tsipras since February resumed talks with the EU and international financial institutions to implement the third phase of the financial "aid" to the country. Due to the fact that the deadline for the payment of the IMF's 1.5 billion euro was completed on June 30 during the negotiations between the Greek government and representatives of the Euro group was presented conditions of the third stage of credit.


New conditions and the reaction to them of the Greek government to broaden the financial problems of Greece to the level of geopolitical format. Key conditions include reform of the tax and social sphere, which according to some projections are fraught with even greater deterioration of the social situation of citizens. Prime Minister Tsipras rejected these conditions and went on to take radical steps.


The Greek government decided to postpone the payment of the IMF's 1.5 billion euro, the activities of banks suspended until July 7, cash withdrawal from ATM is limited to 60 euros, on 5th July was appointed the referendum, which will determine the country's response to the new conditions of the IMF. Analysis of financial problems and political processes taking place in their background allows considering in detail, revealing the political significance of the situation:


A)    One of the most popular theses of modern political philosophy is built around the argument that democracy eliminates the conflict between them. Although the events surrounding Greece and exclude the possibility of military conflict, observed rhetoric between parties rather tense. Such statements of Prime Minister A. Tsipras as "no one gave the right to speak the language of blackmail and ultimatums," or "they want to donate to their political pride and dignity and not get from us with the terms of the agreement," showed that the relationship between European democracies can go far beyond the context of the cooperation;


B)    The American philosopher N. Chomski a few months ago has suggested that similar problems after Greece may also shake Portugal, Spain and even Italy. Referring to the debt relief in Germany in 1953, Chomsky pointed out that such a step against Greece would be the only correct way out of the situation. It should be noted that the practice of writing off international financial institutions credit debt of the case, however, the situation with Greece has already adopted a political nature. The decision to postpone the payment of debt to the IMF Greece unofficially announced default, thus putting into question the international prestige of the country and the image of a reliable partner;


C)    B) The appointment on the 5th July referendum will be important. The new government calls on people not to support the conditions of lenders and the political activity of the last few months demonstrates the formation of the dual view. Many observers predict Greece distancing from the Euro zone and even the EU because of the referendum. Finding Greece in the euro area, the economy of which it has a negligible share, is very important. Otherwise, a precedent has arisen deepen economic tensions in the single currency area and to undermine the idea of ​​a united Europe. It is assumed that for this reason, the European institutions will oppose the development of events in this direction, but, be that as it may, the Euro group did not agree with the proposal on the implementation of the Athens payments until the end of the year, decided to await the outcome of the referendum;


D)    One of the consequences of observed events associated with the authority of Germany. It is ranked as the protrusion of Germany of its international image on the background of the events in Greece and recognized by the German government responsibility in preserving the integrity of the euro area.


E)    On June 19, during the International Economic Forum in St. Petersburg Tsipras in conversation with Vladimir Putin discussed the launch of a number of projects. Tsipras said that now with Russia is not negotiating for the provision of humanitarian assistance. Tsipras statement that Greece, as a maritime country, looking for safer ports. That said, Greece on the issue of the balance of forces on the southern borders of the EU is a weak point or a turning force. This increases the likelihood of changes in the geopolitical order in the European region.


Thus, the team Tsipras, who came to power in January 2015, failed to demonstrate the political will in the decision and provided further developments will of the upcoming referendum. In case of defeat in the referendum the government Tsipras will once again demonstrate its inability to maintain a balanced foreign policy in the current tense situation. An important factor for any country faced with political and economic problems, is the regulation of policy between the various forces and agencies by making responsible decisions for the correct assessment of the situation and avoid a deadlock.


Regardless of the outcome of the forthcoming referendum, the actual default of a positive outcome of the event is questionable.

Related news releases



  • SOFAZ revenues from bonuses on oil and gas agreements to mak...
  • USD rate for tomorrow announced
/ 19 July , 2018