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Great Big Fat Greek Expectations

Politics / Eurozone Debt Crisis Mar 03, 2015 - 11:46 AM GMT

By: Raul_I_Meijer

Politics

From what I read in the press every day, as well as from private communication, a pretty wide divide seems to appear between what many people think the Syriza government in Athens should do, and what they actually can do at this point in time. It should be useful to clarify what this divide consists of, and how it can be breached, if that is at all possible.

In particular, many are of the opinion that Greece cannot escape its suffocating debt issues without leaving the eurozone and going its own way, reintroducing the drachma and defaulting on much of its €240 billion debt. Those who think so may well be right. But right now that is mostly irrelevant. Because Alexis Tsipras and his men and women simply don’t have their voters’ mandate to go down that road. They may at some time in the future, but they don’t today. The expectations are too great, and certainly too immediate.


If Syriza wants to achieve anything, it will need to stick to democratic principals and procedure. Every important decision, and every – even slight – change of course will need to be laid out before either the Syriza fraction in Parliament, the entire parliament, or the Greek population as a whole, to vote on. The government looks to be sticking to this principle as solidly as it seeks to stick to its mandate. None of that grey wiggle room that is so typical in most political systems.

This also makes the task ahead that much harder. Syriza must be seen by its voters as doing what it can to remain in the eurozone, while at the same time negotiating terms with the other members that will allow relief from the relentless -humanitarian – pressures the country has been put under by its previous governments and EU partners.

And while it may well be so that Tsipras and Varoufakis et al have in private long concluded that in the long term attempts to succeed in combining these two goals are doomed to fail, or even that the eurozone as a whole has no future, the fact is that for now some 70% of Greeks reportedly demand that the country remain in the currency union.

There’s a deep underlying historic component to this that needs to be recognized if one is to understand what is happening. Before the EU, and certainly the euro, Greece always felt under threat from the east, a result of centuries of occupations. They had a deep longing to be recognized as a part of Europe, and to feel protected in that sense.

Ambrose Evans-Pritchard summed it up quite nicely in an interview from ‘the lion’s den’ over the weekend:

Humiliated Greece Eyes Byzantine Pivot As Crisis Deepens

“When it comes to the choice, I fear Tsipras will abandon our programme rather than give up the euro,” said one Syriza MP, glancing cautiously around in case anybody was listening as we drank coffee in the “conspiracy” canteen of the Greek parliament.

“The euro is more than just money. It is talismatic for the Greeks. It was only when we joined the euro that we felt truly European. There was always a nagging doubt before,” he said.

“But you can’t fight austerity without confronting the eurozone directly. You have to be willing to leave. It is going to take a long time for the party to accept this bitter reality. I think the euro was a tremendous historic mistake, and the sooner they get rid of it, the better for all the peoples of Europe, but that is not the party view,” he said.

This is what Tsipras faces. There’s an almost schizophrenic attitude even among his own caucus. And there may be plenty voices that say he should at least threaten to leave the eurozone, just to have some leverage in negotiations, but they don’t understand the lay of the land. The European ‘partners’ in the talks know only too well that it would be an empty threat: Greek voters don’t want to leave the eurozone, so threatening to go anyway would only ring hollow.

Tsipras instead must repeat again and again that his goal is to remain in the union, and Greece will do what it can to pay off all its debts. He has no wiggle room on that, not at the moment. If he would want to present his people with the option of leaving the eurozone, it could only be done after very extensive talks in which it becomes ever clearer that the ‘partners’ make it impossible for Greece to achieve that other Syriza commitment, of cutting back austerity measures, within the currency union.

He must at some point be able to turn to his people and say: we’ve done all we could, we’ve even compromised some of your election demands, but Germany etc. just won’t give up. He needs to be able to prove to Greek voters that they can’t have both an end to austerity AND the continued membership of the eurozone.

This will take time, probably lots of it. But it’s the only thing Tsipras, if he means to stick to strict democratic rules – which he’s done thus far -, can do. Claiming today from the outside that he should already have left the eurozone, or at least threatened to do so, is premature at best, and not helpful.

The Syriza MP cited above by Ambrose says it all, really. Some of the MPs are pretty much willing to let go of the euro. But they, too, need to understand that Tsipras can offer that option to the people only after long-drawn-out talks, at the end of which he may be able to say:

“Look, you know what we’ve been discussing with the partners, because we’ve kept you informed every step of the way. It is now clear that if you wish to stay in the eurozone, it will mean austerity, it will mean soupkitchens and no health care and no jobs for your children, for years to come. Do you really want the euro that much? If not, we can go it alone, we have the models ready and we can explain them to you. And it will no doubt be difficult at first, but at least it will be our own difficulties, not those imposed by others.. It’s up to you, the people, to decide.”

For now, those talks haven’t been held. So Tsipras can’t say these things. It will need to be a game of patience. There was never any other way.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)© 2015 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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