The Huffington Post | By Eline Gordts
Posted: 11/21/2014 1:59 pm EST Updated: 11/21/2014 1:59 pm EST
In a scathing editorial published on Friday, Bloomberg View accused the so-called "Troika" of raising absurd and counterproductive demands during talks with the Greek government over the country's financial situation.
"Greece's creditors are testing the country's endurance -- again," the editors write. "If they keep pressing, they could split the euro area apart, which would be a disaster for them as much as for Greece."
The Greek government of Prime Minister Antonis Samaras is currently locked in tough negotiations with the European Commission, the European Central Bank and the International Monetary Fund -- the organizations that bailed out the country during its financial crisis in the spring of 2013 and that are commonly referred to as the "Troika."
Reuters explains that the country and its lenders are mainly in disagreement over Greece's deficit, with the Troika pushing for more cuts in public spending in return for the last payment in the country's bailout.
According to Bloomberg View, the offer is toxic. "Further efforts to reduce debt through fiscal tightening are almost certain to fail," the editors argue. "And that's assuming they don't plunge the country into political instability, as they well might."
Greece's government is in a difficult position, as many Greeks are tired of the austerity measures the country was forced to undertake as part of the 2013 bailout agreement.
An opinion poll released at the end of October indicated that the left-wing Syriza party of Alexis Tsipras would prevail over Prime Minister Samaras' party if elections were to take place now.
Bloomberg View's editors argue that if Syriza comes into power after the elections next year, the consequences will be felt across Europe. "Tsipras might be willing to force losses on creditors unilaterally," the editors write. "Rising opposition parties in Portugal and Spain are similarly inclined, and they are watching closely. If markets begin to fear a wave of defaults, the resulting turmoil could thrust the whole of Europe back into crisis."
In a Thursday meeting with Arianna Huffington, president and editor-in-chief of The Huffington Post, Greek President Karolos Papoulias heavily criticized the Troika's positions in the ongoing talks and said the organizations act "as if they are speaking to rocks and not people."
Earlier that day, Huffington had urged Greeks to reject the demands of the creditors. "Greece is at a very difficult place and, if I may express my opinion, it is important for us to say 'no' to the Troika," she argued.
The editors of Bloomberg View argued that countries such as France and Germany should lead the way in recognizing Greece's need for debt relief, instead of having the country pursue additional austerity measures.
The fiscal arithmetic isn't hard to understand. In the end, one way or another, Greece's debts will be written down, and this is widely understood. Debt forgiveness achieves this result in an orderly way and with minimum collateral damage. The costs of the alternative -- a disorderly default -- could be enormous.
A deadline for the negotiations is set for Dec. 8.
Bloomberg View Editorial Urges Troika To 'Give Greece A Chance'