You could almost hear the collective sigh of relief Monday morning when the news broke that the Greek government and its European creditors had reached an agreement. The tough 17-hour negotiations resulted in a reform program that will secure the 82 - 86 billion euros for Greece to avert bankruptcy. But to stay in the euro zone, Greece had to agree to considerable economic supervision.
The negotiations had become all the more complicated since a majority of Greek voters, following the advice of their political leadership, voted "no" in the recent referendum to what they see as the continuation of unfair austerity measures imposed on their country.
It looks like Greece has now found a way to solve its short-term liquidity and debt issues with a bailout deal, and must find a way to live within its means. Some debt relief is clearly part of the solution. However, what Greece needs is a long-term strategy to tackle the underlying reasons for its current economic malaise.
The future of Greece's economy and its ability to provide high and rising living standards to its citizens depend on growth-enhancing reforms, not simply reining in spending or obtaining debt relief. Beyond all the recent brinkmanship and short-term politicking, it is high time to recognize that Greece's economic challenges are rooted in its problems of competitiveness, productivity and social inclusion.