No more moralising, Greece needs its own Marshall Plan

Now that the dust has settled on the second Greek general election in as many months it is striking to realise that the two elections have not achieved a lot. A coalition of Pasok and New Democracy is going to be replaced by – you’ve guessed it – a coalition between the same two parties, although with New Democracy as the largest party. Of course, the seismic shift has been the sudden emergence of the radical left Syriza party, which has completely broken the mould of Greek politics by routing the socialist Pasok party which won over 40% of the vote and a parliamentary majority at the last elections held in 2009. However, while Syriza has so far refused any overtures to join a grand coalition, preferring to go into opposition rather than government, Greece will still have a government with a working majority.

That, though, is the easy part. The real challenge will be whether Greece will be able to stick to the tough conditions of its bail-out agreement and start to slow and painful process of dragging itself out of recession and reducing its debt burden. I think we have seen enough in the past two years to accept that the bail-out package on its own will probably not be enough. Greece is in its fifth consecutive year of recession. GDP has fallen by a quarter since 2007

A few weeks ago a friend of mine was at a conference in Greece with delegates from a number of European countries. He pointed out that Germany’s economic recovery of the 1950s and 60s would not have taken place without the Marshall Plan. Although I hesitate to make the analogy, it is becoming increasingly clear that Greece needs its own Marshall Plan if it is to recover.

After over a decade of overspending and two statistical frauds you might ask why Greece deserves special treatment. But the reality is that a country marked by the high levels of social unrest and desperation as we have seen in Athens has knock-effects on its neighbours.

Indeed, Greece’s difficulties have huge effects on the rest of Europe that are social as well as economic. For example, massive public spending cuts to border patrols has meant that Greece is really struggling to control its borders. Thousands of illegal immigrants from Turkey and other parts of Asia and North Africa are entering Greece each month on their way to the Promised Land of wealth, milk and honey in northern Europe.

There are tools that can immediately be used. The European Investment Bank should be encouraged to bankroll more infrastructure projects to boost employment and help re-build the country. The European Commission should allocate extra structural funds and project bonds. It is not even about solidarity so much as common sense. Our neighbour’s destitution inevitably hampers our own quality of life.

Even with a targeted EU stimulus package and a €130 billion bail-out Greece’s recovery is going to be slow and bumpy. But regardless of whether its politicians deserve help, the Greece people certainly do. Even if they didn’t a Marshall Plan for Greece would still be a good idea. If EU leaders have any sense they will stop the moralising and accept that the sooner the cradle of democracy becomes a more stable and hopeful country, the better for us all.