For euro-zone leaders weary of Greece’s slow movement toward desperately needed fiscal reforms, the early days of that country’s new coalition government have not been wildly encouraging. While reportedly planning to cancel public-sector layoffs and extend unemployment benefits, the coalition’s leaders are set to ask their lenders for a two-year extension for meeting the deficit-reduction targets set by the country’s last bailout, a concession that would require an additional 16- to 20-billion euros in outside funding.
There will be an understandable temptation for the “troika” of the European Commission, the European Central Bank and the International Monetary Fund – not to mention Germany, which has bankrolled much of the relief to date – to tell the Greeks that enough is enough. And to some extent that message needs to be conveyed, particularly given the dangerous precedent that could be set for other bail-out recipients.
The justified impatience of Europe’s power brokers, however, must be tempered by the knowledge that it will be a long and difficult climb out of the massive hole in which Greece currently finds itself. And Antonis Samaras, the country’s new Prime Minister, offers the best hope of leading it.
Although it has been easy to forget in the past few days, Mr. Samaras was the pro-austerity candidate in the recent election. The relief at his victory has been tempered by the knowledge that his centre-right New Democracy party received just 30-per-cent support, only three points more than was earned by the left-wing and stridently anti-austerity Syriza party. Mr. Samaras’ shaky three-party coalition thus has little choice but to show that it is heeding the concerns of a divided electorate.
Greeks’ national psyche is already battered enough (not least after Friday’s trouncing by Germany in the Euro 2012 quarterfinals) that others should be wary of imposing further indignities that could be taken out on whoever has the misfortune of being in government. It is in all of Europe’s interest for the New Democracy party to cement its hold on power, even if that means softening the edges of the current cost-cutting plan.