From Grexit to Grecovery: The Paradox of the Troika's Engagement with Greece

Abstract

Locked in the commitments of previous governments and arrangements negotiated with the Troika back in 2010 and early 2012, the Greek government continues to channel the burden of fiscal adjustment towards the private sector, killing any nascent thoughts of investment and entrepreneurship in Greece. Simultaneously, bold structural reforms are kept hostage to the uncertain balance of the ruling coalition and negligible majority in the Greek parliament. Caught literally between a rock and a hard place, the authorities seek to attain a primary fiscal surplus, hopeful that this will help to bring an end to the essentially faulty economic adjustment programme for Greece in 2014. Surprisingly, the talk of fiscal surplus alone seems to have ignited positive expectations that the crisis might, in fact, be nearing an end. This suggests that in the same way as the crisis in Greece was provoked by irresponsible and inaccurate statements about Greece's fiscal position and Grexit was a viable option through 2011, discourses on Grecovery may prove constitutive of the end of the crisis. This paper explores this issue and by so doing contemplates the evolving nature of the core-periphery relations in the EU and its policy-making.