How the cradle of democracy put ‘EUtopian’ cohesion to the test and gave a glimmer of hope for Britain’s leading role in shaping a new Europe

Economic
Sunday, February 8, 2015
Adriel Kasonta

On 25 January 2015 Greece rejected the harsh economics of austerity and sent a warning to the rest of Europe, a significant step towards resolving a crisis that has been festering since 2009.

“This is a turning of a page, a historical moment for all of Europe,” Yiannis Milios, the chief economist for Syriza, told reporters. “The Greek people are taking their future into their own hands (…) [Europe] cannot go on with deflation, recession, increasing unemployment and over-indebtedness (…) Greece points the way. Our country, our people, are the groundbreakers of a very big change.”

Indeed, with almost 98% of the vote counted, Syriza had 36% (almost nine points more than the governing centre-right New Democracy), becoming the first anti-austerity party to take power in a eurozone country and to shatter the two-party establishment that has dominated Greek politics for four decades.

At a polling station in Mets, a middle-class district near central Athens, Achilleas Mandrakis, said he ran a garage but has been struggling since his wife lost her job at a shoe store. 

“I always voted New Democracy, and I never trusted the leftists,” he said. “But enough is enough, really. We kept giving them a chance, but they messed up. They have made our lives miserable. At least, a different party might change something in this mess, anything.”

"We are voting for Alexis Tsipras to put an end to this misery," added Stavroula Gourdourou, an unemployed mother who voted for Syriza for the first time. "Enough is enough! We will not let them destroy our children."

Therefore, it is not surprising that voters are angry with Prime Minister Antonis Samaras’s coalition government, which has implemented the brutal austerity demanded by the so-called Troika (the International Monetary Fund, the European Commission and the European Central Bank) since Athens received its first bailout in 2010. Greeks have suffered six years of severe slump. The economy has shrunk by more than a quarter. Incomes have collapsed by nearly a third; many workers go unpaid. One in four Greeks - and one in two young people - is unemployed. The social safety net has been shredded. Many families scrape by on seniors’ slashed pensions. Crowds jostle for handouts at food banks. Some children are reduced to scavenging through rubbish bins for scraps. Hospitals run short of medicines. Malaria has even made a return.

“Tsipras won because those who imposed austerity never thought about the effects of such drastic policies that impoverished millions of people,” said Paul De Grauwe, a professor at the London School of Economics and a former adviser to the European Commission. “In a world where people are so hit, they just do not remain passive. Their reaction is to turn to the politicians who will change the process.”

Empty promises or smart strategy?

The Syriza leader has pledged to end what he calls the country’s “national humiliation” by boosting spending and cutting taxes (which would be in violation of its bailout conditions) and negotiating a dramatic debt writedown for Greece’s debt.

But his biggest promise (and the one that has stirred deep anxiety in Brussels and Berlin as well as in financial markets) is to force Greece’s creditors to renegotiate the terms of its financial bailout agreed in 2010, worth 240 billion euros (£179 billion) which expires on 28 February 2015. Syriza officials are seeking a six-month ‘truce’ whereby the bailout programme would be put on hold while talks with creditors began. It faces stiff resistance from the IMF and the ECB, and is politically unacceptable to Merkel who fears it will encourage other ailing eurozone economies to shirk their sides of the bailout bargains while boosting Germany’s own growing anti-euro movement.

On 28 January 2015 European Parliament chief Martin Schulz was politely but firmly reminded that Germany bears huge responsibility for corruption and clientelism in the Greek state and was provided with documents supporting these allegations. He was told that the movement against the German inspired austerity policy “will spread across the continent,” and the Dijsselbloem - Varoufakis Friday meeting had one main message: Greece no longer accepts the IMF, EU and ECB as an interlocutor with its ad hoc bureaucratic committees of dubious legality. “The EU was destroying its people of one its member states with the idea of trying to save it. Nothing worked, the country is in a catastrophe,” a former Greek diplomat, Leonidas Chrysanthopoulos commented.

Greece’s public debt is still a crushing 175% of GDP. With the economy gripped by deflation (prices fell by 1.2% in the twelve months to November 2014) the real debt burden is rising. Even under optimistic scenarios for growth and interest rates, bringing it down would require implausibly large payments to hated foreign creditors for the foreseeable future.

In fact, Germany has been intransigent in the years of the euro crisis, firmly attached to its neo-liberal policies of balanced budgets and cuts - in total denial in the face of leading economists and politicians (from the right as well as left) pointing out that the eurozone is suffering from a major lack of demand.

The EU's most powerful leaders in Berlin, Frankfurt and Brussels have ignored the deeply damaging political, social and economic impacts of their failed crisis management on the EU's member states and on the EU itself. 

Across southern Europe through Italy, Spain, Portugal and into France, high levels of youth and general unemployment have been created over the last five to seven years as failed economic policies have been grimly stuck to. Public services and infrastructure, have crumbled in the face of austerity cutbacks, and politics has fractured.

“Debt is not just a Greek problem. It is not even just a problem of the south, the countries of the EU periphery. It is a European problem (…) If we have an EU divided and countries that cannot pay their debt, and countries like Germany are gaining from that, we have a union that can no longer keep its cohesion,” said Syriza MEP Professor George Katrougalos.

Syriza's victory therefore sends a powerful message to the continent's other indebted nations, including political leaders on the left and right who oppose the sharp government spending and wage cuts imposed by the Troika in return for financial aid. Leaders who are calling for a move away from the focus on budget belt-tightening and structural reform favoured by Berlin.

It is also clear that Syriza's message struck a chord with many voters who do not consider themselves leftists and who would not otherwise vote for a man with a picture of communist revolutionary Che Guevara hanging in his office.

But in most European countries, Alexis Tsipras's win was taken as a defeat for Brussels, especially in the European capitals where such a defeat is most welcome. 

In France, the right-wing Le Figaro newspaper said the victory was a bolt of lightning for Europe and presented the bloc with a major challenge.

"Ultimately, this is just the latest chapter in the eurozone crisis - it increases economic uncertainty and it reminds the UK that we need to work through the economic plan," George Osborne told the BBC Radio 4 Today programme.

"Everyone has in the past looked over the precipice of Greek exit from the euro and pulled back. It is certainly in the UK's interest that we have stability, that we have proper dialogue here between members of the euro (…) But ultimately what the UK needs is a strong partner, and the institutions of the Eurozone are not working well enough for the people of Europe, and that has an impact on us," Mr Osborne added.

It is going to be a remarkable entertainment watching the collision between the democratically expressed wishes of the voters and the rules and economic regulations that have been set up by the European Union. Those EU rules are based on a very different conception of the role of the state. A different governing philosophy in fact.

“The sovereign Greek people today have given a clear, strong, indisputable mandate,” Tsipras told a crowd of rapturous flag-waving party supporters. “Greece has turned a page. Greece is leaving behind the destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain.”

The forty-year-old insisted Greece's new leaders were no longer willing to bow to the "politics of submission."

"Our people are suffering and demand respect (...) We must bleed to defend their dignity," he said.

Thus, the symbolism was enormous when Alexis Tsipras, in one of his first public acts as prime minister, laid flowers at a firing range where, in 1944, the Nazis executed two hundred Greeks from the Communist resistance movement.

It was a clear sign that free Greek people want to break with the feudal order imposed on them by a German-dominated Europe, which is a huge threat to Greek (and other EU countries) sovereignty. 

That is why the new Greek Prime Minister is perceived by many people as a voice of reason awakening the public to what must be done to restore our prosperity and preserve the blessings of liberty for future generations, as: “The voice of reason is more to be regarded than the bent of any present inclination; since inclination will at length come over to reason, though we can never force reason to comply with inclination.”

Everyone knows Europe today is a continent with no growth, no inflation, and high unemployment. It is very hard to tell people that Europe is the solution, that it has the answers.

Both on the left and on the right, beyond the continuously narrowing space occupied by traditional center-left and center-right parties, rising political forces suddenly appear increasingly relevant to European voters.

The results of the recent European elections have seen anti-European parties raging everywhere. The sign of a strong discontent with the European project, predominantly related to an economic basis.

Therefore, I would only like to argue with one point of Lord Lamont’s of Lerwick article for the Telegraph where he warns that the stand-off between Angela Merkel and the government of Alexis Tsipras over austerity could derail David Cameron’s plans to overhaul Britain’s membership of the European Union.

In that respect, it is worth reminding words of a great British statesman, William Pitt the Younger, who once said: “Europe is not to be saved by any single man. England has saved herself by her exertions, and will, as I trust, save Europe by her example.”

An example, as I believe, of her economy, which has grown by 8.1% since 2010. The economy which is now 2.7% bigger than it was before the economic crash in 2007.

The example of a country which has enjoyed the third best economic growth in the G7 since 2010 (more than France and Germany).

Nonetheless, in order to save Europe, Britain will need a strong leader like Sir Winston Churchill. 

A leader who will know with whom he should side with. Just like Churchill knew in 1945.