Monday, July 06, 2015


Referendums are usually about power, not democracy. They are a risky strategy, people do not always vote the way they are supposed to. Pinochet's downfall in Chile is a perfect example of a tactic that failed. But what has happened in Greece is, to my mind, not so much a demonstration of popular resistance to the economics of austerity, but a sign that Tsipras is a capable politician. The referendum has done what it was supposed to do. It consolidated his power.

First, troublesome individuals have been removed. Varoufakis resigned, as did Samaras, the leader of conservative ND.

Second, by convening a meeting of all party leaders, Tsipras has put together a national coalition behind a joint negotiating position and secured their backing. He has neutralised domestic opposition.

Third, he has opened up divisions between his opponents. There are signs that a Franco/German split is developing over Greece.

Now that Tsipras is secure, there are only two possible scenarios remaining. First, there is a deal. The joint statement is based on a vague list of aspirations.
The common goal is to seek a solution that will ensure:
  • The adequate coverage of the financing needs of the Country
  • Reliable reforms, based on the criterion of the just distribution of burdens and the promotion of development, with the least possible recessionary effects.
  • Powerful, front-loaded, growth program, first and foremost for combating unemployment and for the encouragement of entrepreneurship.
  • A commitment towards the beginning of substantive discussion on dealing with the problem of the sustainability of the Greek public debt.
If a deal is signed, it will include austerity measures. Tsipras has already shown that he has been willing to accept many of them in the previous round of discussions.

Though Tsipras has consolidated his power domestically, the Greek negotiating position is still weak. There may be a greater perceived risk of political rather than economic contagion, but will the creditors see appeasement or victory as the best way of discouraging it? And so, the second scenario is also possible, Greek exit from the Euro.

This time we should have a clearer idea much more quickly than before.


They didn't choose appeasement. I am not surprised. 
Euro-zone leaders demand Alexis Tsipras offer them a deal harsher than the one Greek voters just rejected.


Josh said...

Peter, you taught me first year history many years ago at MMU, and I am just about to start a MA in modern history looking at anarchism in inter-war Italy. Thanks for introducing me to such a fascinating topic, and I'm very much enjoying your comments on the Greek Crisis.

Let us all hope that Germany does the only sensible thing and makes sure Greece stays in the Euro with a package that will help Greece pay off its debts, rather than run the economy so far into the ground that Greece leaves the single currency a few years down the line anyway. I'm not holding my breath.

Interestingly i read Varufakis say on his blog that he though a Greek exit would be manageable in two years - I feel like perhaps that is the tactic they were always going for. It will be interesting to see how things pan out without Varufakis - he seemed to be simultaneously a fantastic and a terrible politician - fantastic in his vision for the Greek nation, terrible for his inability to deliver his vision, and the hated for Greece that his stance created.

I was wondering, how are Greek newspapers portraying Germany in all of this? I have come across some very worrying sentiments in online articles on what appear to be mainstream Greek newspapers in English.

The Plump said...


Brilliant to hear from you and good luck with the MA. If you want help or guidance PM me from the blog. I don't have the MMU email any more. I walked when they cut part-time pay rates.

Much of the reporting has been shite all round.Don't expect much else. Keep in touch

Josh said...

Thankyou for the offer, no doubt I will have plenty of questions come September. Can't say I blame you - Greece seems much more appealing that Manchester anyway. Shame more students won't get to learn from you, but I suppose that's what happens when universities don't treat staff right, which seems to be a growing trend. Even walking around University of Birmingham (where I will be) there are union posters everywhere for faculty.

All the best

Hope whatever Germany orchestrates doesn't hit you too hard!

Laban Tall said...

I must admit to wondering what the point of Syriza has been. They were elected in a landslide on a platform of "Stay in the Euro. No more austerity" - a contradictory platform that was impossible to implement but one that was supported by the recent referendum result.

Now it looks as if they're going to get austerity on worse terms than ever, surrender on all fronts. Pretty much any Greek govt could have got "better" terms six months ago. What on earth was the point ?

josh said...

Anti-austerity and pro euro don't have to be mutually exclusive - they should go hand in hand. The fact that they have been made mutually exclusive spells trouble for europe, not just the eurozone

Laban Tall said...

"Anti-austerity and pro euro don't have to be mutually exclusive - they should go hand in hand"

Josh - have you seen what the Euro nations have unanimously signed up to (the Fiscal Compact)?

"By a twist of fate, the Left has let itself become the enforcer of an economic structure that has led to levels of unemployment once unthinkable for a post-war social democratic government with its own currency and sovereign instruments. It has somehow found ways to justify a youth jobless rate still running at 42pc in Italy, 49pc in Spain and 50pc in Greece, despite mass emigration. It has acquiesced in the Long Slump of the past six years, deeper in aggregate than the span from 1929 to 1935.

It meekly endorsed the EU Fiscal Compact, knowing that it imposes a legal requirement on eurozone states to slash their public debt by 1.5pc of GDP in France, 2pc in Spain and 3.5pc in Italy and Portugal, every year for the next two decades - a formula for near permanent depression. It outlaws Keynesian economics, and indeed classical economics. It is a doomsday construct.

This is what they agreed to, and what they have reluctantly defended, because until now they dared not question the sanctity of EMU. And so the once mighty Dutch Labour Party has been reduced to a pitiful relic. Pasok has been obliterated in Greece.
The Spanish Socialist Workers' Party has lost its left-wing to the rebel Podemos movement, freshly victorious in Barcelona. France's Socialist leader, Francois Hollande, has been languishing at 24pc in the polls as the French working class defects to the Front National."

Josh said...

the Fiscal Compact is a perfect example. That article looks really interesting, I will read it later, but from the quote you highlighted, clearly the results of the FC have been disastrous for the European Left, and as a result we are seeing a revival of the far right (good news for noone) and the splintering of populist power that should be directed against stopping the spread of massive inequality. Austerity forced externally on countries will tear Europe apart.