The admission of incoming European Central Bank Chief Christine Lagarde that the 3.5 percent primary surplus target that Greece agreed to with creditors constitutes an obstacle to the growth of the Greek economy and that the issue must be revisited is welcome.
That admission would not have had the same weight in her capacity as the head of the IMF, which has been saying for two years that the target is exceedingly high.
Yet in her position as incoming ECB chief the statement takes on a greater weight because yet another institution is recognising the obvious – that high primary surpluses will keep the Greek economy down as they would in any other world economy.
That means that there are now better prospects of lowering the targets and Lagarde has spoken of something between 1.5% and 2%.
Lagarde’s position reminds us that a wave of populism permeated Greek politics in large measure because it found fertile ground by exploiting the excessive demands of creditors.
It was not only in Greece that logic was abandoned. It was lost also in those quarters and countries that believed that Greece must be punished with severe austerity measures.
If those measures were implemented in the countries of the self-appointed avengers they would have created even greater socio-political chaos than in Greece.
These tragic events of the past must become a lesson to everyone.
Logic must prevail – everywhere.
