It seems like that even though the Greek debt crisis has been going on forever, the leaders are now finally getting to terms with the beast that is on their hands and they are now getting to terms with how to solve or even begin to solve this issue. After long negotiations and mostly political deadlock in Brussels, there seems to be some headway being made by the actors at the centre of it. There is a wilful effort now to make the compromises necessary and make up some of the ground that has been lost over the last two years.
The major actors of implementing a solution are primarily the debt ridden countries like Greece and Spain. Other actors directly involved in this are the stronger countries who are part of the EU like Germany and France and at the end are the economic actors like IMF and the World Bank who are sitting back and giving their input when it is seemed required.
At the fore front are the countries that are going through the crisis themselves. Since the start of this, there was a lack of compromise and effort on the part of the countries themselves. When given the choice of making a decision to choose between austerity and keep things as they were, most of the countries, fearing backlash chose to keep things as they were and try to find another solution.
There was a lack of any serious effort from Greece, Spain, Italy and Portugal and the crisis kept deepening further. In addition to this was the divide in the view of the political and economic actors of the country who could not reconcile and resolve their own issues and agree on a deal which was politically and financially viable. The constant chasm between them did not allow any deal or solution to be reached. Now for the first time, there is progress on this front as countries are now applying austerity measures that are not only recommended but are the need of the hour.
Even though there are widespread protests and anger in the streets, but something has to be done and the bitter pill has to be swallowed to save the Euro and the economies of the countries.
The second major actors are the countries of EU who are strong enough and who have to sustain the Euro as their economies are dependent on it as well. In the start, Germany and France took the lead in this as they had the maximum exposure to the issue and they were more interested in reaching a deal on it. On the other hand, sceptics like Britain and others made it impossible to decide on a common route which meant that the problem was dragged on for a long period of time. Even though the ESM (European Stability Mechanism) had been set up, there was no consensus on how to use it to save the countries.
Now finally Germany has allowed Britain to leave as it was perpetuating the problem rather than helping with the solution. With measures being put in place by the countries, there seems to be some progress taking place which would be complimented by Germany and France now. With the crisis now weighing down on the stronger economies of Germany itself, there is more urgency in reaching a solution before the contagion gets worse and hits these countries as well.
Lastly, are the indirect actors of IMF and others who are looking at the situation with interest. They have been giving their input into the situation and seeing how the situation works out. ECB head Mario Draghi has till now given all indications that all would be done to save the Euro, however, there has been little to no impact of that on an actual solution. The constant downgrading of the debt of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) has raised risk and has battered investor confidence badly and now the lowering of German GDP seems to have sent fresh ripples of uncertainty.
Things are not all bleak though as some progress is being made and even if its slow, it’s better than nothing that preceded this. The latest statement by Christine Lagarde, IMF’s head, shows that there is a new sense of optimism. She has said that a solution is on the horizon and that the Greek debt restructuring will help more the cause in the end. She still adds a certain amount of caution to it by saying that this piece of good news should be rooted in reality and that there should be some caution when a solution is drawn up.