At first sight, the natural sympathies of many people, especially on the left, will be with Greece. Is this not a plucky little country, standing up to the IMF and the richer eurozone countries to oppose austerity politics? And there can be nothing but sympathy for the plight of ordinary Greek citizens after a big drop in their standard of living, high unemployment and cuts to even basic public services.
But anyone who has actually looked into the figures and the details of this saga will know that it isn’t so simple.
Greece asked for bailout loans from the IMF and from its fellow eurozone countries — not from the EU. It was given the largest ever loan of this kind in history: long-term (30 years), low-interest (1.7 per cent) loans destined to give it time to turn the corner. It also negotiated the biggest debt restructuring in history, with the private sector writing off nearly half of Greece’s debt.
Without this help, the plight of Greece would be far worse. Far from imposing austerity, European solidarity actually attenuated the pain — a point often ignored.
For a lot more details on the complexities of the Greek situation, read my article on Left Foot Forward.