international analysis and commentary

Greece: chronicle of an impasse foretold


SYRIZA, the Greek Coalition of the Radical Left, was elected five months ago on the promise of “hope”. Its “Thessaloniki Program” started with the goal of writing off “the greater part of the Greek debt’s nominal value”, together with a program of humanitarian relief, which amounted to 12 billion euros that would be spent in Greece, irrespective of its creditors’ anticipated disagreement. Not only was this program never even remotely considered for implementation, but SYRIZA’s own proposal after five months of negotiations has swallowed austerity measures with indisputable recessionary effects. But this was not enough. It appears that now SYRIZA is cornered, risking a referendum with a very uncertain outcome, in essence a win-win for the troika, and with the Greek banks already closed.

So how could things turn so bad so rapidly?

A point that is often missed is that SYRIZA has been adamantly pro-euro. In fact, so much so, that this has been its main weak spot throughout negotiations. During the election campaign, Alexis Tsipras and his team persistently promised a relaxation of the strict austerity measures imposed by the coalition government of Samaras-Venizelos, although always within the eurozone, since polls showed that Greeks still wanted no rupture with the euro system. But with no power over its currency, the Greek government had to rely on the ECB for cash, while at the same time promising that it would fight austerity in Europe. This proved impossible.

The people elected SYRIZA partially on the assumption that the “Thessaloniki Program” was perhaps over-ambitious, but that they would nevertheless still be better off. The main argument of the New Democracy Party was that people would have a great deal to lose under the uncertainty of an unseasoned bunch of leftist politicians. Apparently, Greeks voted for SYRIZA when there was not much left to lose. It seemed that one could threaten the security of voters only so long as there was some sense of security to be threatened.

After the Tsipras government was formed, it eventually became apparent that they had no intention of enforcing a left-wing agenda. The array of people assigned to key positions, most strikingly the right-wing politician Prokopis Pavlopoulos for the post of President of the Republic, showed that they had no intention of clashing with the old regime. Indeed, after the February 20th agreement, the government was in a spiral that consisted of a continuous watering down of its original program, for which its voters did not seem to care. The explanation is simple: SYRIZA’s voters were not mostly radicals, rather large numbers were former PASOK (Social democrats) and even New Democracy (conservative) voters: people who expected nothing more than to get rid of the politicians who had brought them into this predicament and to avoid paying even heavier taxes.

Apparently, SYRIZA’s settlement with the troika was not enough. Athens was constantly asked for even harsher measures. After a series of concessions, the government suddenly drew a red line in late June, which was for the first time respected, and which led to the announcement of the referendum. What had changed? The likeliest explanation is that SYRIZA would be in a position to sell its voters a bailout agreement with severe austerity measures, on the condition that it include some redistributive measures and some sort of debt relief. The troika (briefly renamed “Institutions”, to no great benefit for either the government or the people) wanted something more.

The Tsipras government promised to put an end to austerity policies in Europe. Communication with the Spanish Podemos (a rising force in Spain at the time, but a party now rapidly distancing itself from the Greek chaos), made it sound possible that together they could form a united party front of anti-austerity forces in Southern Europe. This seemed so plausible, that the exponents of austerity policies tightened the screw even more. Renegotiations, in rapid succession, aimed not at specific fiscal outcomes, but at the very idea of bringing SYRIZA to its knees. This is now becoming even more evident, as EU officials bluntly refuse to meet with their Greek counterparts.

The fact that the troika now asks for “regime change” in Athens should not come as a surprise. In fact, it was exactly the same outcome that followed the last time a Greek politician suggested that the Greek people might want to have a say in the measures that would befall them. In 2011-12 it was Lucas Papadimos, a banker, who took over as Prime Minister

The stakes at this point clearly extend well beyond the fiscal policies of Greece. The Greek government however proved in the course of these last months to be surprisingly naïve. Closing down the banks was the last act in this course of events, where SYRIZA was trapped in an impossible situation: it has promised its voters that it would reach an agreement without threatening the country’s participation in the eurozone, that Greece’s place in the EU is non-negotiable. But now the government is almost the only player to insist that the referendum has nothing to do with country’s future in the eurozone, but only with the rejection of specific proposals.

So, the situation now is a terrifying one for SYRIZA as it looks at the referendum: A “Yes” vote expresses the “better the devil you know than the devil you don’t” camp. It is supported mainly by those who have something to lose, by the upper class or simply by voters who are afraid of the uncharted territory that a “No” vote would lead to. Α “Yes” vote would mean the immediate collapse of the current government, but, more importantly, the implementation of austerity measures directly voted in by the people themselves. This would be ironic in a country that voted just a few months ago in the hope of changing Europe.

A “No” vote, and a rejection of the troika proposal, has one significant advantage: we know well enough that this policy does not deliver what it promises. The IMF has recognized the fact, yet the mistake is then repeated, and the Greek people are blamed for the failure. The problem is that a “No” vote will no doubt lead to a SYRIZA still trying to reach out to the creditors for a fresh agreement, under the pressure of closed banks, even though it has become clear that the troika is unwilling to continue negotiations with the current counterpart in Athens. It will in effect be a left-wing party begging for a deal that will enforce austerity measures on a devastated population.

In short, the SYRIZA experiment is becoming a very forceful demonstration of why the idea (or fantasy) of a change of course within the confines of the euro environment is unattainable. The original promises that the Greek government could have their cake and eat it too were appealing as an election strategy, but when confronted with the realities of negotiations those promises seem to be leading to a humiliating failure.