The EU Bailout for Greece: Making it our Own

By Kalypso NICOLAIDIS and George PAGOULATOS Professor of International Relations and director of the Center for International Studies at the University of Oxford and Professor of European Politics and Economy at the Athens University of Economics and Business (AUEB) After 6 years of Great Depression, Greece signed its 3rd Memorandum of Understanding (MOU) in August, an understanding with its EU partners as to the conditions for being bailed out yet again. What should we think about this deal? First, the size of fiscal adjustment required. The program envisages a gradual fiscal path to a 3,5% primary budget surplus for 2018 and beyond, with intermediate targets of -0,25%, 0,5%, 1,75% for 2015, 2016 and 2017 respectively. This target is ambitious, reflecting the (perceived) political constraint of donors who cannot ask their tax payers for a sacrifice without a Greek one in return. It is certainly more realistic, however, than the prior