Negotiations between Greece and its official creditors – the European Commission, International Monetary Fund (IMF) and European Central Bank – are currently in renewed deadlock.
Yet, only a few days ago, in the Euro summit on Monday, June 22, all indications were that Europe’s political beasts and the “criminal IMF” were ready to accept the latest capitulation on the part of the Greek leftist government, which, since coming to power in late January, has spent a lot of time doing nothing more than “yelling, kicking and screaming” against austerity and the bailout program (and treating senior-level EU officials with disdain in public as part of its well-orchestrated populist theatrics) while at the same time seeking to assure Greece’s euro partners that it is committed to keeping the country in the euro area and that it would fulfill all its obligations to the creditors.
If there has ever been a more lame strategy of negotiations and a greater self-defeating course of public diplomacy in recent history is really quite hard to say, but the incompetence of the Syriza-led government is beyond questioning.
The apparent contradiction of the political and diplomatic posture chosen by the Syriza-led government toward the architects of Greece’s economic and social catastrophe was motivated by two things: satisfying public opinion at home, which had grown quite restless with the obsequious stance of the previous Greek governments toward Europe’s political elite and Germany in particular; and presupposing, quite erroneously, that the Grexit scenario was an unthinkable possibility for Europe and the US. (Incidentally, as further evidence of the amateurism and dangerous political opportunism of the Syriza-led government, it seems to have reached the absurd conclusion that the US under the Obama administration was an actual ally in its struggle to challenge austerity and neoliberalism in Europe!).
Reflecting a political organization/party that had invited and accepted under the same roof extremely diverse political and ideological groups, (1) the Syriza-led government not only failed to set out a clear strategic vision for getting the country out of its current crisis but walked straight into the trap that the euromasters and the “criminal IMF” were setting up for them throughout the course of the negotiations. (2)
Indeed, the leftist Greek government failed to see that what Europe’s neoliberal elite was after, especially after being fully aware of the fact that Athens had no alternative plan, was not merely a humiliating Greek deal for the Syriza-led government but finishing them off completely to send a message to all potential “troublemakers” in the euro area of the fate awaiting them if they dared challenge the neoliberal, austerity-based orthodoxy of the new Rome.
Working in collaboration with the IMF (whom Mr. Tsipras has charged with “criminal responsibility” for the economic and social catastrophe of Greece), Germany’s plan (a nation that has failed to pay its debts repeatedly in modern times and had the bigger part of its foreign debt wiped off in 1953, yet has the audacity now to try to teach moral lessons to Greece) is to have Mr. Tsipras and his one-night “superstar” finance minister tied up with a dog chain and paraded in front of the European political stage for all to see – utterly defeated and humiliated, with their political futures up in the air, whether they accept or reject a humiliating Greek deal.
This is why there is a renewed deadlock in EU-Greek negotiations following the “encouraging” signs for an agreement upon the conclusion of the June 22 Euro summit. Christine Lagarde, who is eager to seek a second term in the IMF and probably wants to show to all IMF non-European member states how tough she can be toward the Europeans, and German finance minister Wolfgang Schäuble, who has been sadistic all along toward Greece, surprised the rest of the euro finance ministers (who have been kept pretty much in the dark for the most part over the proposals submitted either by Greece or Germany and the IMF, thus revealing the true nature of the EU, an imperial center, with Germany acting as its emperor) a day later by rejecting the huge compromises made by the Greek government as unacceptable.
The members of the Greek government negotiation team had submitted a list of proposals for the June 22 Euro summit that were fully in line with the logic of the EU/IMF bailout program for Greece: more austerity and additional structural adjustments. All in all, the proposals they made amounted to over 8 billion euro in additional cuts between 2015 and 2016! The leftist Greek government even proposed a tax increase to incomes above 30,000 euro, thus suggesting that individuals in that income bracket rank among the wealthy! Basic food items and services were to carry a 23 percent VAT. The special VAT rate on Greek islands, which is so crucial for the tourist sector of the economy, was to be removed. The early retirement age was to be increased as of the start of 2016, and a benefit for low-income pensioners was to be gradually substituted, beginning from 2018.
The obvious capitulation on the part of the Syriza-led government to the euromasters and the IMF thugs, which was not the first one, was made just to get a deal done as time was running out for Greece (it has a huge payment to make to the IMF at the end of June in the tune of 1.6 billion euro) and thus to remove the dark clouds of a Grexit that had begun to spread dangerously over Greece, as it had finally become clear that Germany and the IMF were calling Syriza’s bluff and were ready for the unthinkable, i.e., the possibility of a Grexit.
But as it usually happens in situations of negotiations between ordinates and subordinates, master and slave, rich and poor, strong and weak, the more compromises the latter makes, the more compromises the former demands.
Thus, the Greek proposals were found to be inadequate, and there were demands for more blood and tears. Germany and the IMF wanted to force the Syriza-led government to cross its last and final “red line,” which was over additional antisocial measures in the nation’s social security and pension system. Among other things, the Lagarde/Schäuble duo wants the benefit for low-income pensioners to be completed eliminated by 2017. This would mean that a person who receives today a monthly pension for the amount of 500 euro (close to 50 percent of Greek pensioners receive pensions below the official poverty line) would be deprived of about 200 euro, which come as a welfare payment of sorts.
The proposals the Syriza-led government made to the June 22 Euro summit caused quite a stir back home among several Syriza members of parliament and scores of supporters, with some MPs announcing in public that they would not vote for an agreement that not only maintained but reinforced austerity. Yet, the leftist Greek government now faces the prospect of being forced to sign an even more ruthless and humiliating agreement to maintain the country in the euro straightjacket.
This is political manipulation at its best, as Greek prime minister Alexis Tsipras is being asked to sign his own political death.
Indeed, if he gives in to the additional demands made by the EU and the IMF, he will go down in history as yet another Greek prime minister who had to swallow harsh austerity and antisocial policies as part of Greece’s bailout package. In addition, he will probably face a revolt at home with unforeseen consequences for his government and the future of Syriza. But if he refuses to sign, he will be held responsible for Greece’s exit from the euro when the majority of Greek people still want to keep on the euro straightjacket. But perhaps more important, he will be held responsible for the obvious nasty consequences that a Grexit would bring to an economy that imports nearly 90 percent of all the products it consumes, particularly since his government is complete unprepared – and clearly incapable – of managing such an outcome.
So, either way, he is – to put it rather colloquially – screwed.
But that’s the price to be paid for embarking on several months of negotiations with the euromasters and the IMF without a strategic vision in place to end the crisis (and this is not to suggest that there are easy solutions to the Greek debt crisis or to leave the impression that Greece will receive anything but a savage reaction by Europe and the US – only loonies and fools would think otherwise! – if a government opted to leave the euro and embark on the construction of a post-capitalist or socialist economy) and with a cabinet whose members cannot agree even on fundamental issues about economic policy and the future of the country, many of them far more interested in keeping a high public profile and promoting their own views tied to their own political agendas.
Breaking News: An Addendum
In an apparent effort to avoid the traps of decision making on the bailout deal, Greek prime minister Alexis Tsipras has called for a referendum on July 5. The call for referendum has been hailed by pro-Syriza forces as evidence of the leftist government’s commitment to popular sovereignty and participatory democratic practices. However, this could actually turn out to be a referendum on whether or not Greece should remain in the eurozone as Germany lost no time in responding to Tsipras’s tactical gesture with a move of its own: it took off the table the proposal made to the Greek government a few days ago, which included a five-month extension of the bailout program and funding to the tune of over 16 billion euro, most if it now earmarked for Greek bank recapitalization.
Be that as it may, there are good reasons to view the call for referendum as a tool of politics rather than a reflection of some sort of a deep-seated desire on the part of the Syriza-led government to widen democracy and popular participation in the decision making process.
For example, when the Papandreou government had announced its own intent to launch a referendum on the bailout program back in 2011, Tsipras himself had turned against the idea, arguing that it would lead to the collapse of the Greek banking system and cause nothing short of an economic meltdown. Indeed, the moment Tsipras made the announcement about a referendum, one hour after midnight on Saturday, June 27, people began lining up in ATM machines outside banks to withdraw their money.
Undoubtedly, ATM withdrawals will intensity throughout the weekend, and it is quite likely that Greek banks will not open on Monday morning, thus confirming Tsipras’ prediction about would have happened back in 2011 if the Papandreou government had held a referendum on the bailout deal.
Moreover, Tsipras has been in support of the euro at least since he began to sense that the tide was turning in favor of Syriza, not only refusing to embark on a national dialogue about the pros and cons of a return to the drachma but actually chastising in the course of the campaign those members in his own party for trying to do so. But now that he is with his back hard pressed against the wall and can see the dark, menacing clouds spreading over his political future, he does not hesitate to ask the people to make a decision in a very short period of time on a question of immense critical importance for the future of the nation.
Still, let’s say that the referendum won’t be about Greece’s future in the eurozone – as the Tsipras government will surely claim in spite of Germany having taken off the table the bailout proposal on which the Greek people will allegedly be casting a vote either for or against – but about the proposal of the creditors which, incidentally, is slightly more extreme than the one proposed by the leftist government itself in the Euro summit of 22 June! Should one conclude, then, that if the people vote “yes” (i.e., accept the bailout deal) the Syriza-led government will accept the proposal offered by the euromasters and the “criminal IMF” and carry out their neoliberal diktats consistently and efficiently?
Too many unanswered questions for anyone but the truly naive or the many Greek citizens who have a penchant to support their party leaders at all times (a key factor in the ills that befell Greece in the contemporary political era) without engaging in critical thought of their own.
1. The political babel of Syriza consists of right-wing and ultra-nationalist camps (ie., the Independent Greeks party, Syriza’s coalition partner in government) to defunct social democrats and outdated Keynesians who saw primarily the crisis in Greece as a threat to capitalism itself and were suggesting, accordingly, all sort of interventionist schemes to keep Greece in the euro area and the emergence of an alternative socio-economic system at bay, including recycling unemployment schemes with the minimum wage so as not to upset the exploitation rate in the private sector (!) and IOUs, and from remnants of euro-communism and the old communist left to post-leftism, postmodernist tendencies devoid of any true understanding of contemporary political realities and without structured support at the popular, working-class level. Indicative of its political nature, not even one large, mass protest or demonstration has ever been organized or successfully carried out by Syriza. Its official organ Avgi still sells thousands of copies less on a daily and a weekly basis than the official organ of the Greek Communist Party, which in the elections of January 2015 barely got over 5 percent of the popular vote.
2. Syriza had been converted long ago into an utterly confusing, “non-left” left political organization, and the restructuring of the Greek economy and its moribund political culture, the abandonment of outworn, antediluvian modes of political thinking and behaviors, and the transformation of capitalism and its transition to a socialist economy had been completely removed from its political radar. For an argument along those lines, see C. J. Polychroniou, “To Change Greece Requires Changing the Political Culture – and This Could Be a Tall Order, Especially for the Left.”