Why Now Is the Time for Greek Debt Relief

The conventional wisdom is that debt relief can’t happen before the German election. But things could be worse after it.

The Acropolis of Athens, Greece, April 19, 2009
The Acropolis of Athens, Greece, April 19, 2009 (John, Melanie Kotsopoulos)

The conventional wisdom is that Greek debt relief can’t happen before the German election. Angela Merkel wouldn’t want to risk the ire of her conservative voters.

But things could be more difficult after the election. There is a good chance Merkel’s Christian Democrats and the liberal Free Democrats will win enough seats to form a center-right government. The latter, while smaller, are more adamant in their views on the Greek debt crisis. They would find it hard to justify debt forgiveness to their voters.

That’s not the only reason why the time is right. Donald Trump and the rise of illiberal democracy around the world is another. Europe must circle the wagons to provide a counterweight to this dangerous development.

Solidarity

The Greek reform record is still mixed. The country’s far-left government has missed no opportunity to weasel its way out of spending commitments.

But soon the Greeks will have been in crisis for a decade. A whole generation has come of age with diminished prospects in life and no illusions about the EU.

Forgiving part of the nation’s debt, which is 175 percent the size of its economy, would go a long way to making clear European solidarity still extends to the Aegean.

Especially because Trump’s illiberal world order begins on Greece’s doorstep: Turkey’s president, Recep Tayyip Erdoğan, has revealed himself to be an autocrat who will undoubtedly make life more difficult for Europe in the years ahead.