It's amazing that Greek voters have put up with the draconian austerity so long.
We may soon see how flexible a leader Angela Merkel really is. Since the SPD isn't acting in any sense as an opposition party, Merkel and her press admirers have created a conventional wisdom in Germany, that George Packer's profile in the New Yorker last year passed on mostly undiluted (The Quiet German: The astonishing rise of Angela Merkel, the most powerful woman in the world; 12/01/2014 issue; accessed 11/25/2014), that she is successfully providing quiet stability to German voters and is some kind of political genius in doing so.
She's actually playing a very high-stakes, ride-the-tiger game with her austerity policy. And she's doubled-down with the economic sanctions against Russia. But it can very visibly go to pieces very quickly. Next weekend's Greek elections will be another significant inflection point.
Karl-Peter Schwarz recently described the breakup of Czechoslovakia into the Czech Republic from Slovakia in the early nineties in "Unterschiedliche Transformation in Tschechien und der Slowakei" Europäische Rundschau 4/2014. They tried to maintain a common currency after splitting up. And what happened sounds like an accelerated version of what's been happening in the eurozone. Slovakia didn't have their own currency that could be devalued. They suffered major capital flight and a brutal "real devaluation," i.e., wages and salaries plunged.
Myrto Tsakatika looks at the Greek political situation in Why Are European Leaders So Afraid of Greece’s Syriza Party? ISN Blog 01/20/2015:
According to the Thessaloniki programme that lies at the heart of Syriza’s election pledges, the party is committed to renegotiating Greece’s colossal debt. Despite five years of extreme austerity, this still exceeds 170% of GDP. Syriza wants a 50% debt write-off as part of a wider European Debt Conference along the lines of the German debt write-off of 1953.Sounds good to me!
The programme also includes a promise to replace the 2010 bail-out agreement signed with the Europe with a long-term national plan aimed at the reconstruction of the Greek economy.
Syriza will also put in place a set of emergency measures meant to alleviate what it calls the “humanitarian crisis” caused by austerity. Minimum wages and public investments will be increased to trigger consumer demand, create jobs and kickstart growth. Only then, Syriza argues, will the country be able to repay its debt. Exhaustive negotiations will be conducted with creditors and European partners but Greece will remain in the eurozone.
The reforms envisaged involve the democratic refoundation of the Greek state. This means unsettling decades of collusion between big business, media groups and political parties. Syriza may indeed be well placed to make such a radical change work since it has not been a party of government and has not been involved in such practices.
Her conclusion seems out of sync with her analysis, though: "But this is not the social democratic left. It is a radical new experiment. It is perhaps this, and not the potential for economic turmoil under a Syriza government that scares European leaders the most." It's not the program of the current European social-democratic parties, for sure. Because they've adopted Angela Merkel's Herbert Hoover/Heinrich Brüning economic policies.