Thursday, 19 March 2015

Greek Government Should Stop Communicating a Grexit and Start Planning the Next Day

A Grexit is more likely than anyone would think. It has been a real option for the government since day one. The current government has been gradually and very cleverly communicating this to the Greek people, either directly through ministers or indirectly through MPs and affiliated press. When it actually happens, it will not be a surprise to anyone. Contrary to the common belief that a Grexit is not in the government’s options as it would most probably mean the end of the current government, this might not be the case after all.

In case an agreement is not reached with the Troika (or Brussels Group or Institutions or whatever one wants to call it), the coalition government will follow the strategy it has already been following since day one or even before that, when it was in opposition: blame Germany, other Eurozone countries, and the ECB. Another thing it has been doing since day one and will keep doing is showing Greek people that it negotiates hard even if the real negotiations just started a week ago. Looking at previous and recent polls, it appears that the current government has been successful in its strategy as the majority of Greek people share the perception that, unlike Mr. Samaras’ government, this one actually negotiates.

Given the popularity the government appears to enjoy amongst Greek people, mostly due to communication strategies and not actions, even a ‘Grexit’ would not mean the end of this government, at least not for the first few months. Majority in Parliament will be maintained as it is no secret that a great number of MPs of the two governing parties do not view a ‘Grexit’ as a problem. Contrary to the majority of the Greek electorate, they would rather support a ‘Grexit’ than oppose to it.

Greece is heading towards leaving the Eurozone and the current government has paved the way. Mr. Tsipras talks about external forces that want the newly elected government to fail. That could be true to some extent. However, he should first take a look at some members of his party and most members of Independent Greeks (ANEL). Whatever the outcome may be, ‘Grexit’ or not, both paths would require radical reforms if Greece were to fully recover. To compensate for the consequences associated with a ‘Grexit’ and achieve sustainable recovery, the government would need to impose even more radical reforms than it would if the country were to stay in the Eurozone. This is something the Prime Minister and his staff should start thinking about and plan ahead instead of focusing mostly on how things are communicated to the public in an attempt to maintain popularity and stay in power.

Panagiotis Asimakopoulos, Economist and Political Analyst, LSE MPA Graduate

No comments: