So there will continue to be new chapters of the Greek crisis. Here I want to comment on what I understand to be the fault of Alexis Tsipras' government in the recent negotiations.
My perspective is very different from the disputes within his Syriza Party. One of Tsipras' responses to his internal Syriza critics is provided by The Greek Analyst, Tsipras’s nonpaper slamming SYRIZA dissenters 07/21/2015.
Tsipras made a very practical call taking into account the risks and opportunities within the very narrow range of options that German Chancellor Angela Merkel had successfully established as the dominant leader in the EU. Syriza had a clear policy of solving their debt crisis within the eurozone. It was the program on which they were elected. It was established in internal discussions and disputes within Syriza. It was a clear distinction from the explicit goal of leaving the eurozone and establishing a separate currency, which everyone seems to assume would be called the drachma, like the last separate Greek currency.
That goal was advocated by the Communist Party and the far-right Golden Dawn, as well as by some members of Syriza. But that approach was rejected by Syriza. Part of Syriza's hope, which presumably persists, is that hopefully sooner than later, they will gain effective allies in other eurozone countries. Upcoming Portuguese and Spanish elections could provide some of that support. In fact, Merkel's hardline opposition to any departure from the draconian austerity program in Greece is due to her determination to scare Portuguese and Spanish voters from elected anti-austerity governments.
How realistic Syriza's hope in that regard is, is another question. Recent public grumbling by the social-democratic governments of France and Italy have provided some encouragement on that front. On the other hand, France's President François Hollande was elected in 2012 promising to oppose Merkel's austerity program. Once elected, he hardly made any pretence of resistance to it. Maybe one of these days, he will actually get around to it.
Prime Minister Matteo Renzi of the Democratic Party in Italy has even more rational reasons than the government of France to oppose austerity measures. But since taken office in early 2014, he has been singing from the neoliberal hymnbook pretty faithfully. And the language of faith is appropriate here. Austericide economics is very much a faith-based devotion, not evidence-based economics. Susanna Böhme-Kuby in Bulldozer Renzi Blätter für deutsche und internationale Politik 07/2015 describes his demonstrated commitment to deflationary, neoliberal policies.
The one big miscalculation that I can see in the Tsipras government's approach to the negotiations is that, given the enormous determination by Merkel and her Finance Minister Wolfgang Schäuble to crush Greece's political resistance to their austerity program was that to attain meaningful concessions within the eurozone, he had to be prepared to actually exit the eurozone. And that Tsipras wasn't willing to do.
Wolfgang Münchau describes this correctly, if in a way somewhat less sympathetic to Tsipras' dilemma than I would be, in Grexit remains the likely outcome of this sorry process Financial Times 07/19/2015
Alexis Tsipras should never have hired Yanis Varoufakis as his finance minister. Or he should have listened to him, and kept him on. But instead the Greek prime minister chose the worst of all options. He followed Mr Varoufakis’ advice of rejecting the offer of the creditors - until last week. But having done this, Mr Tsipras committed a critical error by rejecting Mr Varoufakis’ plan B for the moment when the country’s banks closed down: the immediate introduction of a parallel currency - IOUs issues by the Greek state but denominated in euros. A parallel currency would have allowed the Greeks to pay for their daily transactions when cash withdrawals were limited to €60 a day. A total economic collapse would have been avoided.In Wie Deutschland den Euro sprengt Spiegel Online 20.07.2015, he emphasizes how shortsighted a self-destructive Germany's behavior in those negotiations really were. The short-term destruction, of course, hits Greece. The longer-term destruction will eventually wreck Germany's leadership in the EU if it is not corrected by future, post-Merkel governments. There he writes:
Die Griechenlandkrise hat uns gezeigt, dass eine ökonomisch nicht nachhaltige Situation in kürzester Zeit alle politischen Tabus sprengt. Das Primat der Politik kann sich langfristig nicht über ökonomische Logik hinwegsetzen.
Aus ökonomischer Sicht ist Griechenland im Euroraum nicht mehr lebensfähig. In diesem Punkt hat Wolfgang Schäuble recht. Aus griechischer Sicht wäre ein Austritt besser.
[The Greece crisis has shown us that an economically unsustainable situation can int the shortest time blow up all political taboos. The primacy of politics cannot in the long run prevail over economic logic.
From an economic point of view, Greece is no longer viable in the euro area. On this point, Wolfgang Schäuble is correct. From the Greek point of view, an exit would be better.]
Christiane Amanpour interviewed Varoufakis for CNN International ( Mick Krever, Varoufakis: 'We made mistakes' 07/20/2015):
Varoufakis said he had sympathy for his former boss [Tsipras].The video is here, Varoufakis: 'We made mistakes' 07/20/2015:
"He was faced with a choice: Commit suicide or be executed."
"Alexis Tsipras decided that it [would] be best for the Greek people for this government to stay put and to implement a program which the very same government disagrees with."
"People like me thought that it would be more honorable, and in the long term more appropriate, for us to resign. This is why I resigned. But I recognize his arguments as being equally powerful as mine."
Why debt sustains corruption in Greece and vice versa
Christos Koulovatianos, John Tsoukalas Vox 20 July 2015
Olaf Boehnke (Greece and Germany's game of chicken European Council on Foreign Relations 07/17/2015) holds out optimism that Merkel may come to her senses:
Although many observers expected that Angela Merkel and Wolfgang Schäuble would have been feted for their victory upon their return to Berlin, the exact opposite has been the case. The tersest reaction came from Thomas Strobl, vice chairman of the Christian Democrats (CDU) and Schäuble’s son-in-law. Prior to the CDU’s steering committee meeting after the euro summit last Monday he said: "The Greek has now annoyed long enough." While Strobl has since been heavily criticised for this remark, this chauvinistic attitude does reflect strongly the sentiment of many people in Germany and in Strobl’s party in particular. ...I don't think Merkel sees the world that way. She the leader of the economically most powerful country in the eurozone and she's done very well from her German point of view with her strategy of domination. One of the greatest risks for political and business leaders is there is an inevitable tendency to continue doing what has been successful in the past. Unfortunately for the eurozone and for the periphery countries especially, what has been successful for Merkel and her hardline neoliberal outlook is horribly destructive for the countries practicing her austerity policies, especially for Greece.
These elements - plus the broadening criticism of German hegemony in Europe- may well bring her to the point where she has to demonstrate political leadership in a way Mario Draghi did when he announced that the ECB will “do whatever it takes to preserve the euro”. Once all Eurozone member states have agreed to the new negotiations it would be wise for Merkel to demonstrate her political commitment to the Greek people with a speech in front of the Greek parliament or a public place in Greece in order to reinforce what she has been best at: getting conflicting parties back to the table and finding a compromise. In her speech today, she paid special attention to the importance of the French-German cooperation. If she is really interested in achieving a reliable solution for the current crisis, she and Francois Hollande must include Alexis Tsipras in finding a political agreement which gives him and the Greek people real, not forced, ownership of such a deal.
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