On Brink of 'Irreparable Split' Between Rich and Poor Nations, European Leaders Scramble

In the wake of Greece's historic 'No' vote this weekend, European leaders are scrambling to cement a new deal after the resounding rejection of the austerity program that has heretofore dominated fiscal policy and conversation.

European Parliament President Martin Schulz confirmed that Greek Prime Minister Alexis Tsipras will address parliament plenary on Wednesday morning. Tsipras is expected to put forth a new written proposal for financial aid, one that reflects the wishes of the people--who on Sunday voted overwhelmingly against the latest bailout offer, which would have imposed further austerity and economic hardship.

On Tuesday, European heads of state are meeting in Brussels to discuss the pending economic crisis. According to reports, Tsipras will meet with German Chancellor Angela Merkel and French President Francois Hollande ahead of the evening's leaders' summit to discuss his plan. Tsipras is expected to call for the country's EUR323bn ($356bn) debt to be reduced by up to 30 percent, with a 20-year grace period, BBC reports.

Also on Tuesday, the newly appointed Greek Financial Minister Euclid Tsakalotos was sworn in, taking the place of Yanis Varoufakis who on Monday announced his resignation. Though European lenders had reportedly urged for Varoufakis' resignation as a condition for the continued talks, experts expect Tsakalotos to maintain the same aggressive anti-austerity stance as his predecessor.

Greece native Harry Konstantinidis, an assistant professor of economics at the University of Massachusetts Boston, says he expects Tsipras to present a program "that re-establishes collective bargaining and shifts the burden of adjustment on the wealthier strata of the Greek population rather than on pensioners and low-income people."

"Of course," Konstantinidis added, "the likelihood of such a plan being accepted is slim."

Meanwhile, Greek banks will remain shut on Tuesday and Wednesday and the European Central Bank further increased pressure on the country's financial system by refusing Monday to increase the Emergency Liquidity Assistance (ELA) for Greece.

As the standoff between Europe's financial elite and the leftist Syriza leadership--now emboldened by the recent referendum--comes to a head, experts are calling for an "ethical approach" to Greece's economic crisis.

In a column Wednesday, leading economist Jeffrey Sachs--himself a proponent of global capitalism--argues that, in the interest of preserving the eurozone, the onus is on Merkel to step in and propose a "fresh start" for Greece by easing the country's debt burden. Because, Sachs says, "it is the right thing to do and because it accords with Germany's own experience and history."

"To do otherwise at this stage would create an irreparable split between Europe's rich and poor, and powerful and weak," Sachs writes.

Sachs continues:

That idea of an ethical approach to the Greek crisis might sound absurd to readers of the financial press, and many politicians will undoubtedly consider it naive. Yet most European citizens could embrace it as a sensible solution. Europe rose from the rubble of World War II because of the vision of statesmen; now it has been brought to the verge of collapse by the everyday vanities, corruption, and cynicism of bankers and politicians. It is time for statesmanship to return - for the sake of current and future generations in Europe and the world.