Surprising pushback in Europe against Angela Merkel's threats to Greece

Austrian Chancellor Werner Faymann (SPÖ) is somewhat surprisingly pushing back against German Chancellor Angela Merkel on her threats toward Greece, along with Austrian Finance Minister Hans Jörg Schelling (ÖVP).

They are referring specifically to comments by Merkel, her Finance Minister Wolfgang Schäuble and her sadly compliant Social Democratic Grand Coalition junior partners that a "Grexit," a Greek exit from the eurozone, would be no big deal and easily manageable. It's a crass threat to the Greek voters that they better not elect SYRIZA, the anti-austerity party headed by Alexis Tsipras.

Faymann called the threats "unnecessary Wichtigtuerei," the latter meaning something like "a lot of hot air."

Nachrichten.at (Faymann: "Grexit-Diskussion ist unnötige Wichtigtuerei" 06.01.2015) quotes Faymann as follows (my translation follows):

Ich halte es für entbehrlich, einem Land, das vor Wahlen steht, auszurichten, was man da alles wie sieht. Die griechische Bevölkerung hat das Recht, ein Parlament und eine Regierung zu wählen, wie sie das für richtig halten. Griechenland hat in der Vergangenheit die Verpflichtungen eingehalten. Für mich gibt es da keinen Zweifel, dass das auch in Zukunft so ist.

[I consider it inappropriate to tell a country that stands before elections how they should see things. The Greek population has the right to elect a Parliament and a government that they think is right. Greece in the past has complied with its obligations. For me, there is no doubt that it will also be the same in the future.]

In the context, this is a clear statement of support for Greece and a criticism of Merkel's arrogant, bullying threats.

The part about Greece's "obligations" is more ambiguous. Greece can't meet its current debt and budget-reduction obligation without enduring years more of depression.

On the other hand, when the current conservative government of Greece is still claiming it will meet those obligations, the Austrian Chancellor can't very well take a position that the eurozone should recognize reality on Greece's "obligations" when the Greek government isn't defending such a position itself.

Even the head of the Österreichische Institut für Wirtschaftsforschung (WIFO) is objecting to Merkel's highwire threats about kicking Greece out of the eurozone:

Auch Wifo-Chef Karl Aiginger hält die Debatte über einen Euro Austritt Griechenlands für "absolut entbehrlich". Sie würde Griechenland und Europa schaden und die Autorität von EU-Kommissionschef Jean-Claude Juncker untergraben.

"Griechenland hat hohe Opfer auf sich genommen, aber zu wenig an einer eigenen Strategie für die Jugend, neue Arbeitsplätze und Gründung von neuen Firmen gearbeitet. Zu viele alte Privilegien, von Schiffsreedern, Militär, Kirche, übergroßem Staatssektor und die Dominanz von Old Boys Networks wurden erhalten, mit geringem positiven Einfluss europäischer Programme zur Veränderung der Strukturen und zur Erneuerung", sagte Aiginger.

Europa brauche Griechenland, weil es ein Brückenkopf sowohl zu Nordafrika, als auch zu Arabien und zum Schwarzmeerraum sei. "Ohne Griechenland wird die Integration des Balkanraumes in das Europäische Projekt gestoppt", warnt Aiginger am Dienstag.

[Even WIFO chief Auch Wifo-Chef Karl Aiginger considers the debate about an exit of Greece from the euro to be "absolutely inappropriate." It would damage Greece and Europe and undermine the authority of EU Commission President Jean-Claude Juncker.

"Greece has accepted great sacrifices, but has worked too little on their own strategy for the youth, new jobs and the creation of new businesses. Too many old privileges of the big shippers, generals, the Church, a bloated state sector and the dominance of Old Boys Networks have been maintained, with little positive influence of the European program for structural change and renewal," said Aiginer.

Europe needs Greece, because it is a bridgehead to North Africa, as well as to Arabia and to the Black Sea area. "Without Greece, the integration of the Balkan area in the European project will stop," warned Aiginger on Tuesday.]

Aiginger is repeating the austerity mantra of "reform," not surprisingly for the head of a very establishment, business-oriented group. But he sounds pretty alarmed at Merkel's arrogant threats.

Other countries seem to be positioning themselves to take advantage of the opening a SYRIZA victory in Greece would create. Nachtrichten.at notes that Italy's social-democratic-led government has so far been restrained in its public statements. But it quotes Gianni Pittella, chairman of the Social Democratic caucus in the European Parliament and an ally of Italian Prime Minister Matteo Renzi, "Das Ausscheiden Griechenlands aus dem Euro hätte einen Domino-Effekt für die gesamte Eurozone" ("The separation of Greece from the euro would have a domino effect for the whole eurozone").

French President François Hollande, who nominally resists Merkel's hardline austerity but has a pitiful record when it comes to actually resisting it, also said on Monday that Greece alone would decide on its continuing participation in the eurozone. About as decisive as soggy toast, but still a distancing from Merkel's arrogant posture.

The mainstream El País editorializes in Respetad a los griegos 06.01.2015 warning against the possibility of a new contagion of crisis around the potential German confrontation with a new anti-austerity government in Athens. El País also expresses alarm over the threats that "some European institutions and leaders" have been making to the Greeks on how they should vote - this basically means Angela Merkel and the German government - and warns they could be counterproductive.

In a statement that sounds downright nostalgic, the editorial notes:

Hay que respetar la libertad y la voluntad de los griegos — siempre que se plasme en alternativas respetuosas con el Estado de derecho — por principio democrático, porque la Unión es una comunidad de derecho y una federación de democracias.

[The freedom and the choice of the Greeks have to be respected - as long as they are expressed as respectable alternative within the rule of law - for the democratic principle, because the Union is a community of law and a federation of democracies.]

It's becoming harder for anyone to pretend that Angela Merkel observes such niceties. And the EU's much-discussed "democratic deficit" is becoming harder and harder to ignore. (See also, Hungary, Orbán government)

Without specifying Angela Merkel as the main leader doing threats, the editorial notes that the "stupid general threat of expulsion from the euro" is not only "imprudent" but could facilitate "catastrophe."

Also in El País, Claudi Pérez (La Comisión Europea enfría los temores de salida del euro en Grecia 05.01.2015), quotes a former adivseity supporter:

“Es indignante que Berlín chantajee a los griegos si eligen democráticamente a Syriza, que ha prometido un alivio de la deuda que el país necesita desesperadamente”, apuntó el analista Philippe Legrain, ex asesor de José Manuel Barroso. “Ese tipo de comportamientos, condicionados por los intereses egoístas de los acreedores, han transformado la comunidad de iguales que era la eurozona en una cárcel para los deudores”, , añadió. “La austeridad ha sido desastrosa en Grecia y si los líderes europeos no ofrecen un acuerdo favorable a Atenas la crisis será inevitable.

["It is outrageous that Berlin is blackmailing the Greeks if they democratically elect SYRIZA, which has promised a reduction of the debt that the country desperately needs," indicates the analyst Philippe Legrain, ex-adviser to José Manuel Barroso. "The type of behavior, conditioned by the egoistic interests of the creditors, has transformed the community of equals that was the eurozone into a debtors' prison," he added.]

Wow, I guess it's not just "heterodox" economist like Jamie Galbraith and Yanis Varoufakis or New Keynesians like Paul "the Shrill One" Krugman saying stuff like this any more!