Readers of Stranger Things may recall
my post on the victory of Syriza, a party dominated by left-wing
college professors, in the Greek parliamentary elections. Since
January I have periodically followed their efforts to renegotiate the
terms of Greece's bailout agreements with the EU. The talks collapsed
in late June, as the “Troika” (the European Commission, European
Central Bank, and International Monetary Fund) refused to accept the
Greek government's proposed budgetary concessions, and Prime Minister
Alex Tsipras withdrew from the talks. David Attewell summarized the negotiations on Lawyers, Guns & Money:
1) In February Syriza and the Troika
reached a preliminary agreement: Syriza could set its own fiscal
policies if they achieved the Troika's budget-surplus targets.
2) In June, after the Greek government
delayed a loan payment, Greeks began a “slow-motion bank run.”
3) The Troika used the crisis to take a
much harder line: it rejected Syriza's proposed mixture of tax
increases and pension reforms, and demanded higher VAT (value-added
taxes) and deeper pension and defense cuts. Most would
disproportionately burden the poor and middle class.
I agree with Attewell's conclusion
about the Troika's ultimatum: “It's difficult to escape the
conclusion that the creditors'...proposals were about regime change
more than economics.” The Commission, ECB, and IMF wanted to crush
Syriza and force the Greek electorate to vote in a more agreeable
group of center-right technocrats.
Euclid Tsalakotos, a Syriza party
official and scholar, observed that the EU and ECB consist primarily
of bureaucrats and financiers who despise everything about academics.
According to an interview with one of Tsalakotos' colleagues, when Tsalakotos went to
Brussels in 2013, he wanted to argue and reason with EU officials, as
professors prefer to do. However, they merely “recited rules and
procedures” and expected their Greek subordinates to fall into
line. Granted, Syriza's officials have employed some inflammatory
rhetoric since they won the elections, but they did so in the context
of negotiating and arguing with European officials. The officials,
however, prefer ultimata to negotiation.
I suspect Alex Tsipras pulled out of
the negotiations with the Troika because he understood that the
European Commission and ECB had made his government an offer it could
not accept – not without collapsing. Calling a referendum on the
Troika's proposal may have been Tsipras's attempt to demonstrate this
point. The results of that referendum, held on July 5, surprised even
Syriza: over 60 percent of voters said “No,” including most young
and working-class Greeks. With considerable cluelessness, Le Monde
wondered “how these young people who had grown up with the Euro,
Erasmus program, and European Union are turning against it.”
Reported Strathis Kouvelakis of the Syriza Left Platform, “the
response from all of those interviewed was simple: we have seen what
Europe is about, and Europe is about austerity, Europe is about
blackmailing democratic governments, Europe is about destroying our
future.”
Europe's heads of state and the wealthy
financiers they service have little interest in the young, and even
less in democratic referenda. The ECB had on June 30 tightened the
screws by ending “liquidity support” to Greece's banks, forcing
the government to close them and introduce capital controls. (David
Attewell observes that by this action the European Central Bank
abrogated its core role, which is “to stop bank runs.”) After the
referendum, German officials proposed a five-year exclusion of Greece
from the Euro – which would have become permanent, since European
leaders would not allow Greece back into the Eurozone if its economy
crashed as a result. Paul Krugman argued that Greece should
simply drop the Euro and deflate its new currency. However, in the
short and medium term this would cause much hardship. Greece depends
on imports of food and medicine and has few exports beyond tourism.
Tsipras and his government decided that
repudiating the referendum and capitulating constituted their
least-worst option. The Greek parliament accepted on July 16 a new
deal exchanging 86 billion Euros in bailout funds for tougher
austerity measures and the forced sale of 50 billion Euros of state
property. Thereby they surrendered much of Greece's sovereignty to
the unelected Eurogroup. Former Finance Minister Yanis Varoufakis said as much, calling the agreement the modern equivalent of the
Versailles Treaty. If I recall correctly, that treaty ultimately
made its primary victim, Germany, a threat to the rest of the
continent. But then, Europe's bankers and conservative elites rather
liked Hitler, didn't they?
On the moral implications of the whole
imbroglio, finally, this essay on Interfluidity takes the best tack. Author Steve Waldman admits that Greece's government had deep
and persistent problems, including systemic cronyism and widespread
tax evasion. European banks lent it money anyway, assuming that
Greece's membership in the EU would protect their investments. When
Greece got into trouble in 2010, European leaders decided to bail out
its creditors and impose harsh costs on the Greek people (not just
the government). There was plenty of blame to go around for Greece's
financial problems, but since 2010 Europe's officials and bankers
have crafted a morality play in which Greeks belong to an
irresponsible and evil nationality, and other Europeans remain
lily-white. This “betrays the ideals of European integration,”
and subverts the fundamental purposes of the EU and the Euro: to replace nationalism with international cooperation and prevent
another World War. The Union's current political leaders would rather
line their pockets, grind down the remnant working class and young
people, and let their successors deal with the consequent political
explosions.
Speaking as an American, though, from a
country that has curtailed voting rights, saddled its young people
with crippling debts, bailed out bankers, and reintroduced debtors'
prisons, I suppose I shouldn't throw stones.
(And, yes, I stole the title for this
post from someone else. Wish I remembered who it was.)
The above photo is by Yannis Kolesids, via Jacobin Magazine.
