Greek Debt Talks Continue at ECB

Liam O’Donnell & Ida Brooks

Budapest, Hungary -- Tensions are running high at the European Central Bank, with member states and delegations fiercely debating the issue over the bailout of Greece from the European Union, a controversial topic that has come to light in the aftermath of the financial crisis in the country in 2008. The crisis evolved from poor GDP growth, government debt and deficits, as well as budget compliance and data credibility, and has turned into one of the largest depressions that an European nation has faced in recent years. Greece, who joined the European Union in 1981 and adopted the Euro twenty years later, has been the center of much recent debate within the confederation, as the economic crisis provides a strain for other member states as well. Some states advocate for the bailout of the country from the Eurozone, as they believe that it is necessary to make every effort to allow Greece to resume reforms and growth within the EU to insure the stability of the confederation as a whole. Other member states support the idea of removing Greece from the EU, as they are tired of giving Greece endless financial loans, and believe that without the country the Confederation would be able to better function and collaborate.

There is a clear divide among delegates at the ECB, with some demanding the removal of Greece from the eurozone, and others attempting to seek out more holistic and reconciliatory approaches to solving Greece’s debt crisis.  Such delegates seeking out restorative solutions includes Ireland, who proposed the distribution of Eurobonds to better control the flow of money and in turn lower the inflation rate. Furthermore, the delegate from Ireland proposed further bailouts and the defaulting of a portion of Greece’s debts to allow for a more manageable repayment of such debts. Countries such as Poland, Draghi, and Denmark have been working together to look for measures to implement, and have discussed items such as conducting a surveillance program to monitor the change in Greek national debt and unemployment rates in relation to the implementation of such bailout measures. Strong economic centres of the EU have reinforced their dedication to ensuring that Greece remains in the Eurozone. Such countries include France, who stated that it is willing to continue the allocation of monetary resources to bailing out Greece. Furthermore, the delegate from France discussed the importance of turning the EU into a fiscal union, allowing for the implementation of greater fiscal and economic policy.

Delegates demanding the removal of Greece from the Eurozone include Germany, a country who states they are tired of bailing out Greece, and urges the country to leave the Eurozone. Germany believes that a fiscal union, through which decisions about the collection and expenditure of taxes are taken by common institutions, is not possible as it leads to nationalistic tendencies. The nation supports working with Greece to ensure that the bailout process is smooth, and strongly emphasizes the strain the economic and political crisis in Greece has hurt the European Union. Other member states who support the departure of Greece include Latvia and Croatia, who describe Greece’s membership in the European Union as a  “weak link in the chain.”

Despite obvious differences among delegates in regard to this divisive issue, hope that progress will be made in relation to the Greek debt crisis hasn’t died out. Whether through the withdrawal of Greece from the Eurozone or through further bailout measures, this committee will hopefully resolve this issue, allowing for a more sustainable and growth focused European Union, unhindered by internal economic woe.