"So maybe simply enforcing austerity does not suffice. Maybe the way day-to-day economic and social activity is organized, from licensing to policy debates, from the rule of law and court decisions to the protection of the freedom of the press, are more important after all. They determine the extent to which people take initiatives, create economic activity, and thus generate taxable income."
A simple (and rather convincing!) narrative had developed early on in the crisis: reckless overspending had kicked Greece's cost/price competitiveness out of the water and the way to repair that was to re-establish cost/price competitiveness. In the absence of the devaluation tool, it had to be internal devaluation. In short: austerity.
That might have worked if lack of cost/price competitiveness had been the only (or even the major) problem of Greece; if institutional strengths, regulatory efficiency, judicial efficacy etc. had otherwise functioned well.
I have always argued that the Troika should not be misinterpreted as an institution out to help Greece. Instead, the Troika was/is a creditors' committee watching the interests of creditors and to expect more from them is an illusion.
However, there WAS a vehicle whose task it would have been to help Greece in the process of reforming the country. That was the EU Task Force for Greece which in its mission statement listed the following noble objective:
"The Task Force is a resource at the disposal of the Greek authorities as they seek to build a modern and prosperous Greece: a Greece characterized by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos."
"We need meritocratic decision-making in Greece, be it by left- or right-wing governments, and both in the public and private sectors. More than debt relief, Greece needs meritocracy. This is not something that we can translate into a specific prior action. This is not something that you can order from the Eurogroup. This is something about a political and governance culture of responsibility and a mentality that needs to continue to be developed. Many Greeks have suffered during the economic crisis. The price they paid should not be for nothing."