A comment on Europe and the Greek crisis

It has become clear over the past week that the leaders of the European union are willing to go to any lengths in terms of inflicting further suffering on Greek citizens to maximise the chances of a “yes” vote securing a majority in the referendum to be held on July 5th, scarcely concealing their hope that this will produce “regime change” in that country. At this critical moment, it seems important to think beyond the conjuncture.

About possible consequences, for example. Europe’s leaders appear to be expecting either to force the entire democratically elected government out of power, bringing back the politicians who were willing to do their bidding, or to split the Syriza coalition fatally and maybe end up with a humiliated Alexis Tsipras retaining office with a new group of allies but willing to agree to anything to halt the economic collapse that EU actions have now induced. If the EU approach has a strategic political (as distinct from economic) purpose, then it is presumably that of stopping the anti-austerity movement in its tracks and preventing the “contagion” spreading, to Spain or Italy, for example.  But this attempt to promote regime change is extraordinary risky. Even if growing shortages of food and medicines convince more Greeks to end their resistance over the next forty-eight hours, the result of the referendum will surely still be close if the opinion poll results are to be believed. Apart from the fact that bullying does not always work as a tactic of persuasion, especially when it has become a matter of trying to salvage some social and political dignity, a close-run result either way is hardly going to produce mass resignation and political stability. The fascist-populist ultra-Right is likely to advance under circumstances that deny hope, and violent conflicts of new kinds may well emerge.

One might have thought that the consequences of its approach to regime change in Libya might give this European elite reasons for thinking about possible consequences more profoundly. Evidently not. Although the EU’s approach to Russia might suggest what kind of logic is at work, and this clearly involves the USA as well, It is difficult to see what advantage there could possibly be in fostering new opportunities for a xenophobic populist Right to advance politically in Europe unless the forces currently in control see that as a better option for keeping themselves in power than making concessions to a relatively “soft” left-wing movement like Syriza. Syriza is, after all, only defending principles that used to be taken for granted by all social democratic parties in Europe before Tony Blair and his ilk turned them into what Tariq Ali so perceptively dubbed the “extreme centre”. So thinking about the possible political calculus at work here is pretty depressing.

But it is also difficult to see, as even the IMF now admits, how maintaining the present EU hard-line could possibly be feasible given the unsustainability of the Greek debt. Even if the EU does succeed in engineering regime change to some technocratic government or a new coalition run by the politicians who lost the last elections, austerity will have to be deepened beyond the proposals over which negotiations broke down and without debt-relief nothing will work in the longer term. It is this conundrum that has persuaded economists such as Joseph Stiglitz, Paul Krugman, Thomas Piketty and Jeffery Sachs, who structurally adjusted Bolivia into mass poverty before he saw the light after being was dispatched to Yeltsin’s Russia,  to conclude that voting “no” is the best of two unattractive options. In fact, although one can also find economists advocating a “yes” vote, they are mostly doing so simply because they also feel it is the lesser of two evils, because “no” would likely lead to Greece leaving the EU. It appears that some Greek academics who take this latter view see leaving the EU as a threat to the country’s national security and democratic stability. But it seems possible to argue that the European Union institutions are really not very democratic and that the political elite in charge of this club has little real respect for democracy in Greece. I rest my case on both the democracy and security issues on the long-term consequences of past EU interventions in the Balkans.

There are actually a lot of good arguments that the Eurozone system was, from its inception, structurally problematic and that German (and US) approaches to economic policy were going to cause the problems for the whole of Southern Europe in the long term.  The case for Greece exiting the Euro rather than attempting debt renegotiation is made very trenchantly by Heiner Flassbeck and Costas Lapavitsas in their book Against the Troika: Crisis and Austerity in the Eurozone (2015, Verso). Alexis Tspiras and his party may have felt that they faced an insuperable political difficulty selling that to the Greek people. But they may live to regret not having offered the public a broader ranging and more rigorous diagnosis of the roots of the country’s problems. Doing so would simply have made the German position seem even more unreasonable, and prepared the ground better for what may prove the only viable strategy if the “no” vote prevails.

Neither austerity policies nor efforts to use economic sabotage to promote regime change are problems simply for Europeans at the moment, so putting Greece into a broader context is important.  Being “rescued” by the IMF is not an option that it would be easy to recommend to anyone in the light of historical experience. Some of Greece’s difficulties are the result of specifically Greek conditions, but the kind of “blame game” that some politicians and commentators are playing over Greece should not distract us from looking at the deeper causes of crises that may have exceptionally unattractive social and political consequences in both developed and emerging economies. So I belong to the camp that hopes the Greeks will vote “no”, although I also hope that Syriza (and similar parties such as Podemos in Spain) will prove equal to the challenges that such an act of resistance would create.


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