It is difficult to make sense of the EU governments’ attitude towards Greece – not if we’re using rational measurements. There was a deal on the table – as reported by Paul Mason of Channel 4 news. The Greek government was happy enough with it, the EU Commission was happy enough with it, it didn’t cross all the t’s but it provided the necessary breathing space to allow a more sustainable and beneficial deal for both creditors and debtors to emerge. So what went wrong?
One of the problems with writing about the current crisis is that by the time this gets posted, events have moved on – such is the speed at which events, and rumours of events, are moving. So let’s just hit some highlights.
You’d think Greece has been lethargic in applying its austerity programme, resulting in comments like – ‘Why can’t Greece be more like the virtuous Irish?’ But as Kevin O’Rourke states, pointing to the comparative fall in the structural deficit between Ireland and Greece:
‘So, to summarise: the Greeks have done more “reform” than we have, have endured a lot more austerity, and live in a country where the costs of austerity are likely to be higher than here. Perhaps the Irish government might want to tone down its assertions of relative virtue, and display a bit of solidarity with Greece. Is a less deflationary and less creditor-friendly Eurozone not in Ireland’s long term interests, assuming that we remain a member of the single currency?’
What the new Greek Government wants is very reasonable: a few weeks to draw up an agreed programme. Claims that ‘we don’t know what they want’ (made consistently by our Finance Minister) are misleading and insulting. They are not asking for extra money, they are not seeking transfers from, or additional liabilities to, other members states. From the outset, Greek Ministers has been asking for what can be called a ‘bridging loan’ which would only last a relative few weeks – in order to negotiate a new programme. In other words, they are asking for time – a reasonable request for any new government.
And that is exactly what was almost agreed – or at least was on the table. Paul Mason quotes from a draft agreement was drawn up by EU Commissioner Pierre Moscovici
‘The above (the proposed agreement) forms a basis for an extension of the current loan agreement, which could take the form of a (four-month) intermediate programme, as a transitional stage to a new contract for growth for Greece, that will be deliberated and concluded during this period.’
This coming from the EU Commission which is not known for its debtor sympathies. Nonetheless, it was a constructive intervention – even if some officials from the EU Finance Ministers’ meetings tried to insist it didn’t exist.
This got nowhere even though Greece was willing to sign. So why the opposition to what could be seen as a face-saving compromise for all involved?
Quite simple – the Syriza government cannot be seen to ‘win’. Never mind debt write-downs (which Syriza is not looking for – Alexis Tsipras has made it clear they will honour all contracts, all obligations); the ‘win’ here refers to breathing space and the political momentum that such space might encourage throughout Europe.
The breathing space would give time to construct an alternative to austerity. The breathing space would provide momentum, not only in Greece, but in other countries (and not just the periphery) to those forces who have been arguing for an alternative to the current deflationary regime. The breathing space would create the danger that the initiative could be wrested away from the controlled-rooms of Minister meetings and taken up by popular forces. The breathing space could be a very dangerous space – dangerous to the current elite.
What might happen if the new Greek Government constructed a programme whereby relaxation of arbitrary budget surplus rules (which would cost nothing to anyone but would allow for a humanitarian and investment programme), coupled with an authentic reform that tackled the corruption and tax evasion imposed on Greek society by the oligarchs? A programme that met all EU fiscal targets but did so in a different way than what is being demanded by EU member-states? This wouldn’t put some folk and some ideologies in a good light.
This helps explain why only a matter of hours after they were elected, the new Greek government was subjected to a torrent of demands to continue the Troika, extend the current bailout deal, maintain the current course – no deviation, no relaxation. Even now, the bottom line from the Eurogroup is that Greece must apply for a bail-out extension – even though this is unnecessary and gratuitous given the EU Commission’s intervention.
Syriza raised hopes and expectations throughout Europe in the aftermath of their historic victory. They continued those with the new Prime Ministers’ first address to the Greek parliament. They swept through Europe in the person of the Finance Minister Yanis Varoufakis and his support team.
That had to be shut down – and shutdown quickly. If Europeans got similar ideas, all manner of problems could arise for domestic governments who have a more grim agenda in mind. The last thing the Syriza government should be allowed is to carry on all this hope and expectation-raising. Normal business must be resumed and seen to be resumed. Immediately.
This explains the Irish Government’s attitude of ‘no breathing space’. This might give time for progressive voices here – in concert with other European groupings – to critique and propose alternatives to a deflationary programme of squeezing public spending, cutting taxes and obsessing over a balanced budget while labouring under incredible debt levels. Give the Greeks breathing space and we might get ideas about getting one of our own– and that can’t be allowed.
The Irish Government’s position is unconscionable and unreasonable. Their opposition to the Greek Government’s reasonable request should be highlighted at every opportunity, opposed at every turn; and not only for the sake of the Greek people.
For, like the Syriza Government, the next Irish Government – hopefully the first progressive government elected in this state – will be demanding the same thing: breathing space. Let’s hope it is not too late – for Ireland, for Greece and for Europe
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