Question: which Eurozone government has 61 percent public support for their position in the Greek bailout negotiations? Answers on a small postcard.
Last January Syriza won 36 percent of the vote, which allowed them to enter government as the senior coalition party. Yesterday, 61 percent of the Greek people supported Syriza’s rejection of the terms laid down by the 18 other Eurozone governments. There can be no doubting the Syriza Government’s mandate.
The next week will be crucial in hammering out a deal – if that is possible given the intransigence of the creditors to date. How can we, in Ireland, provide concrete assistance to the people of Greece?
We can look to the honourable behaviour of the Greek Finance Minister Yanis Varoufakis as a guide. This is not the time, however tempting, to use the referendum result for domestic political purposes. The Greek people need concrete support. We should be calling on the Irish Government to take up the following positions in the upcoming negotiations.
First, we should demand that the Irish Government now engage constructively in the negotiations with Greece: first, by calling on the ECB to comply with their own commercial mandate and provide the necessary liquidity to allow the Greek banks to open. In the short-term capital controls and withdrawal limits would have to remain, but re-opening the banks would take the pressure off businesses and households. Failure to do this is a coercive political act. Opening the banks should be the Irish Government’s first diplomatic stop.
Second, the key short-term issue is budgetary – allowing the Greek government to run a deficit. Given the humanitarian crisis and the collapsing of the productive economy, the demand for a primary surplus (i.e. more revenue than expenditure when interest payments are excluded) is not only penal and irrational; for creditors it is the surest way to guarantee that debts will never be repaid. Greek businesses need space to start growing and employing; fiscal policy should be assisting, not thwarting this.
Third, the Irish Government should support the establishment of a European Debt Conference. This does not commit any government to a particular position but it at least provides a space, outside the day-to-day politics of the Eurogroup and the EU, to consider medium-term solutions – not only for Greece and the peripheral regions – but for the entire Eurozone. My own preferred solution would run along these lines, but the Irish Government need not take up any position prior to such a conference being held.
And, fourth, the Irish Government should support the release of structural funds already committed to Greece to kick-start a badly need investment programme. This could also involve reframing the National Strategic Reference Framework to allow Greek businesses to access the funds allocated to them but denied because of inflexible rules.
These should form the core of any progressive campaign to re-align Irish Government policy:
- Open the banks
- Suspend austerity (the first step in getting rid of it)
- Support a European Debt Conference
- An investment programme for the Greek economy
The Greek government would still be under strict supervision and required to make progress on reforms: rehabilitating the tax collection system, ending corruption and patronage, and ending the dominance of oligarchical control over economic sectors. But this wouldn’t pose a problem for the Syriza government. These policies already form the core elements of the programme they were elected on. These reforms will take time and can only succeed when the economy and society are given the fiscal and political space to implement them. Hard to do much when your banks are closed.
Let’s not demand too much. The Irish government does not bring the biggest battalion to the Eurogroup. But it has a potentially influential voice given our experience of a bail-out. And given the importance of this issue (keeping the Eurozone intact) it is amazing there has not been a parliamentary debate over what position the Government should adopt in these negotiations. This should change immediately.
The Irish Government should be required to come into the Dail and explain and debate its negotiating position.
We have an opportunity to push the default button. When Syriza was elected in January, the Eurozone governments should have been relieved: for finally, there was a Greek government that was intent on tackling the issues of reform – corruption, the patronage, the oligarchical controls; reforms which the previous New Democracy and PASOK failed at (or didn’t even try). That didn’t end well.
There has now been, in effect, a second election in the form of a referendum. There is no doubting Syriza’s mandate. Nor is there doubting their continuing commitment to the reform and modernisation of the Greek economy.
Let’s start anew. There is still time. And the Irish government can play a pivotal role in that.
That is the least we should demand of our elected representatives the EU.
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