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IN the wake of the Greek voters’ fairly unequivocal verdict in Sunday’s referendum, the decent way for Brussels to respond would be to cut Athens some slack and conclude a deal that leaves out some of the more toxic strictures on which the European Union (EU) negotiators have thus far insisted.
Unfortunately, doing the decent thing does not come naturally to the eurocrats and politicians in charge. The initial reaction from Germany suggested it was pretty miffed with the Greek people for their stubborn refusal to endorse for an indefinite period the collective punishment that has been their lot for the past five years.
The July 5 referendum, called just eight days earlier, was something of a desperate gamble for the government led by Prime Minister Alexis Tsipras. It was necessitated by a near-impossible situation after the troika — the European Commission, the European Central Bank (ECB) and the IMF — turned down a deal offered by Greece that was more or less tantamount to capitulation.
On Sunday, the poor and the young carried the day.
It was politically impossible for Tsipras to go any further. The existing bailout agreement was approaching its end and the consequences of walking away from the negotiations were something for which the Syriza-led government did not wish to assume responsibility. This is understandable, given that its mandate did not extend to a possible rupture with the EU.
Key components of the European structure, meanwhile, reacted to the idea of a referendum with a degree of hostility that was quite extraordinary. The objections ranged from the brevity of the interim between the announcement and the vote, to the irrelevance and/or incoherence of the actual question.
The referendum question, although infelicitously worded, wasn’t all that difficult to understand. It asked whether the troika’s most recent terms — effectively the same set of policies whereby the economy has contracted, incomes have sharply dropped and unemployment has soared — were acceptable. The government in Athens strongly advocated an oxi (‘no’) vote.
A barrage of propaganda from Brussels, Berlin and elsewhere on the continent meanwhile bludgeoned Greeks with the message that an oxi majority would oblige them to leave the eurozone and quite possibly the EU, whereas the reverse would oblige the Tsipras government to step down. In some cases, the calls for regime change reached an alarmingly shrill pitch. And the ECB did its bit for the improvised coup plot by freezing emergency liquidity assistance, which led to the closure of all banks, plus capital controls and small ATM withdrawal limits.
That, it was probably assumed, would unleash enough angst to persuade most Greeks to stick with the status quo — and topple a left-wing government of which the EU does not approve, and which it certainly does not wish to see replicated elsewhere. One problem, though, was an IMF statement noting that limited debt write-offs — something Athens has been demanding, with Brussels and Berlin adamantly opposing — were inevitable in the context.
The European message was taken up with gusto by Greece’s privately owned TV channels and newspapers. The effort appeared to be succeeding, with opinion polls on the eve of the referendum suggesting the nai (‘yes’) vote was easing ahead, with the centre-left and centre-right opposition parties coming down on the latter side. The rival sides’ noisy rallies in Athens and elsewhere broadly reflected a class divide, as well as a generational split.
On Sunday, the poor and the young carried the day, with 80pc of those under 34 opting for oxi. The overall result, rejecting the purveyors of fear by 61 to 39pc, vindicated Syriza’s resistance to the troika’s terms.
Instead of gloating, Tsipras has replaced his finance minister— with the outspoken Yanis Varoufakis, who rubbed his interlocutors up the wrong way because he simply couldn’t resist speaking truth to power, making way for another respected academic, Euclid Tsakalotos, previously the chief negotiator with Greece’s creditors. (Varoufakis announced his resignation in his blog, saying his absence from negotiations might facilitate a settlement, and characteristically adding for good measure: “I shall wear the creditors’ loathing with pride.”)
In addition to the renewed popular mandate, Tsipras has also persuaded the centrist opposition parties — New Democracy, Pasok and To Potami — to endorse his negotiating strategy. Whether any of this will impress the likes of Angela Merkel and Jean-Claude Juncker remains to be seen, but at least some European leaders, including the French president and the Italian prime minister, are willing to concede that the Greek popular verdict makes a difference.
Following talks with François Hollande on Monday, Merkel ventured the view that Greek democracy was all very well, but the views of citizens in the creditor countries also count. Were she to organise an EU-wide referendum on austerity in general or even specifically on the Greek bailout, she may well be as surprised by the result as she was last Sunday.
Published in Dawn, July 8th, 2015
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