04/17/2015 12:00 pm ET Updated Jun 17, 2015

Greece or Europe on Trial in Latvia

More pragmatism including further professional advice in goodwill should hopefully produce a better state of mind all around at the Eurogroup's forthcoming gathering in Riga, Latvia, on 24 April. Against a background of Europe's still unfulfilled obligations toward the Greek people.

For years now everyone in Greece has been increasingly finding it an uphill struggle trying to reconcile the aura of Europe -- at least as the 2010 winner of the Nobel Peace Prize? -- with a poor record subsequently. Adopting failed "blind austerity" financial and economic policies remarkably inconsistent with the eurozone's prospects for robust growth and prosperity.

Also creating in the process, as in the case of Greece, compulsive economic damage running into billions of euros. Which in turn the European Union -- with, alas, successive Greek governments remaining incredibly aloof -- has not yet acknowledged, let alone redressed. But ignoring as well the Union's founding principles of "unity and solidarity" apparently flourishing nowadays only in terms of pure theory.

It is well-known that these policies have produced -- albeit "unintended" but freak -- unparalleled levels of unemployment alongside a collapsing level of national income that has been literally eviscerating salaries, pensions, social services etc. in Greece. Driving ordinary tax-paying citizens by the thousands to commit suicide: among them doctors, lawyers and other professionals that include talented people from all levels of (failed) businesses. Made worse by inadequate, almost non-existent, public investment expenditure indirectly contributing to the country's rising indebtedness.

Is it not, therefore, pretty futile in the circumstances to expect to normalize the economic landscape in slowly suffocating Greece without first agreeing to compensate the stunningly observable social and economic damage already inflicted upon millions of innocent people? In other words, why put the horse before the cart as has been happening all along?

Instead of, as a sine qua non here, scaling down in real terms the country's bulging (by now unserviceable) sovereign debt proportionately adjusting it downward? Correctly reflecting the damage and consequently establishing as €150b the remaining debt of Greece. Particularly as it has been widely estimated privately that this is an important overdue rectification of today's inaccurately publicized level of €350b. And so, why not consider bringing this festering issue before a specially convened European Conference or Synod next to resolve institutionally the issue at last?

Europe, in short, is still probably capable of vindicating itself. Giving, as suggested, an honest opportunity to Greece to forge ahead with multiple structural changes it seriously needs in order to transform its economy -- languishing in disarray for too long -- into an engine of progress with sustained growth serving the best interests of a greatly underestimated people. Ah yes -- and fully justifying its creditors, too.


Nicos E. Devletoglou, Emeritus Professor of Economics, University of Athens, is author of the books Academia in Anarchy: An Economic Diagnosis (Basic Books) written jointly with Nobel Prize Laureate in Economics James Buchanan; and Consumer Behaviour: An Experiment in Analytical Economics (Harper and Row).