Athens searches frantically for a new compromise between politics and economic reality

ECOFIN Council - February 2015. From left to right: Yanis Varoufakis, Greek Minister for Finance, Luis De Guindos Jurado, Spanish Minister for Economic Affairs and Competitiveness. (Audiovisual Services, European Council - Council of the European Union, Shoot location: Brussels - Belgium Shoot date: 17/02/2015).

ECOFIN Council – February 2015. From left to right: Yanis Varoufakis, Greek Minister for Finance, Luis De Guindos Jurado, Spanish Minister for Economic Affairs and Competitiveness. (Audiovisual Services, European Council – Council of the European Union, Shoot location: Brussels – Belgium Shoot date: 17/02/2015).

This week the new Greek government started faltering on all accounts. The young Prime Minister Alexis Tsipras, who got elected on 25 January under a populist banner to change everything in this crisis stricken nation, proposed Prokopis Pavlopoulos for President of the Republic, an old fox representing the corrupt and incompetent political system which governed the country for the last thirty years.

On the same day, Tuesday, Tsipras also tried to cheat his compatriots and deceive the European Union too by asking for a continuation of Eurozone’s financial support but ostensibly ‘denouncing’ the austerity that goes with it, knowing very well that he can’t have the one without the other. Today in Brussels the Eurozone will decide if the latest Greek proposal can constitute a base for negotiations. The ECB conceded yesterday afternoon only an additional €3.5 billion in liquidity that can keep the Greek banks alive for only a few days. But let’s return to Athens.

Picking a President

Yesterday Tsipras picked this person for President of the Republic, and by doing so he let down the Greeks who had believed he meant what he had said about fighting the clientele politics that Pavlopoulos represents. On the same day Tsipras tried to cover up an almost total repudiation of his pre-election uncompromising rhetoric against the ‘Memorandum of Understanding’ his country has signed with its Eurozone peers. The MoU contains both; a soft loan agreement and an austerity and reform program. The one doesn’t exist without the other. Yet Tsipras insists that Greece can keep receiving soft loans from Eurozone without applying strict conditions.

During the two and a half years after June 2012 when the current Memorandum was signed by Greece and the ‘Troika’ of EU-ECB-IMF, Tsipras was very eloquent slamming every politician who would even remotely insinuate that the country needed it. SYRIZA has turned the terms ‘Troika’ and ‘Memorandum’ into real swear words.

Conciliating promises and reality

Tsipras, under this banner, dragged the country to the 25 January legislative election. The term of the incumbent President of the Republic expires in March and the constitution requires the election of a new President by the Parliament with a 3/5 majority that the previous center-right-socialist (New Democracy- PASOK) government couldn’t summon. After three barren votes the previous Prime Minister Antonis Samaras, the leader of New Democracy, was obliged to dissolve the Parliament and call an early election that all opinion polls were predicting Tsipras and his left-wing SYRIZA party were expected to win, as it actually happened on 25 January.

Still SYRIZA didn’t win an absolute majority and had to form a coalition government with an extreme right-wing, nationalist anti-immigrant party the Independent Greeks (ANEL). The connecting material was their common populist anti-Memorandum, anti-Troika, nationalist rhetoric. ANEL is an offspring of New Democracy and its leader Panos Kamenos has served as minister in conservative governments in the recent past. He was rewarded by Tsipras and now holds the portfolio of National Defense.

All that for what?

It’s really an absurdity that both the parliamentary groups of Tsipras’ SYRIZA and the ANEL of Kamenos are now proposing an old New Democracy Politian, a real fox of the Greek clientele political system, Prokopis Pavlopoulos for President of the Republic, whom Samaras can’t refuse. Had Tsipras and Kamenos done so in the previous Parliament and no legislative election would have been held, neither the country would have had any problems of the existential kind that it now faces. In short, it was not the country or its people that Tsipras and Kamenos bothered to ‘save’, but it’s now proven beyond reasonable doubt that they just wanted to rule over them.

Let’s now turn to the other trick that Tsipras and Kamenos are trying to sell to Athens and Brussels. Having sold ‘national dignity’ to Greeks and the end of austerity, they both perfectly knew that this would end up, as it now has, to capital outflows and a bank run. In view of that, they are presently trying to convince everybody within and without the country that it is possible to continue receiving soft loans from Eurozone, without strict conditions. They pretend they can repudiate austerity, structural reforms, deregulation and privatizations and still get money from Europe.

Political brinkmanship in economics

To achieve this, the duo now proposes to Greece’s Eurozone partners to sign a new loan agreement, but with limited auditing and conditionality. Of course this is mainly addressed to the internal audience, while Tsipras and Kamenos hope that in Brussels they will be able to conclude a political accord, concealing the real tough terms. Those will be agreed at a later stage, when the public opinion in the country would be more perceptive to realities. In any case they are both caught between their electoral promises for less austerity and the financial realities. In reality the Greek government is playing with words trying to avoid the use of the terms ‘Troika’ and ‘Memorandum’.

It is exactly at this stage that the Greek issue has currently culminated. Athens is about to propose today the extension of the Master Financial Assistance Facility Agreement of 2012 of €109.1 billion endorsed by Greece and the European Financial Stability Fund, representing the EU and the Eurozone member states. This is not exactly the Memorandum of Understanding but contains all the financial aid details and conditions. Athens is happy with that for as long as the words ‘Troika’ and ‘Memorandum’ are not mentioned, despite the fact that the terms and conditions related to auditing, austerity and reforms are there all right.

Caught in words

Tsipras is really trapped between his pre-electoral rhetoric and the pressing economic realities, with capital massively flowing out of the country and a bank run that accelerates. It’s up to Germany and Brussels to decide if they want to pay another lip service to Greece and understand the idiosyncrasies of Athens. By the same token it’s not at all clear where a blunt denial by Berlin could lead Greece and its precarious government. The administration contains even neo-Stalinist elements, who could long for a state-capitalism kind of closed economy, hoping for Russian support. In such an uncharted terrain accidents do happen and nobody can predict where they could lead.

 

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Myanmar companies bankroll ‘brutal operations’ of military, independent UN experts claim in new report

Booking.com commits to align practices presenting offers and prices with EU law following EU action

Why the foundations of the modern world are costing the earth

We need a global convention to end workplace sexual harassment

China’s stock markets show recovery signs while EU is closely watching in anticipation of the €10bn investment

Forced pregnancy in Italy violated ‘woman’s human right to health’, UN experts rule

Medical students as the critical link to address climate change

The digital building blocks of better communities

The EU might as well go down the drain if foreign meddling corrupts May’s elections

Parliament asks for the termination of EU-US bank data deal

EU should promote immigration as a humanitarian issue in order to provide a more permanent solution

Venezuela: ‘Shocked’ by alleged torture, death of navy captain, UN human rights chief urges ‘in-depth’ investigation

Russia won’t let Ukraine drift westwards in one piece

The need to resume preventive policies for chronic noncommunicable diseases

Getting people with disabilities into work requires data

Dignified health for all who live here

International Criminal Court acquits former president Gbagbo of war crimes in Côte d’Ivoire

These 5 industries can drive digital financial inclusion

3 ways governments can address cybersecurity in the post-pandemic world

Scientists in Iceland are turning carbon dioxide into rock

EU to finance new investment projects with extra borrowing; French and Italian deficits to be tolerated

Spread of polio still an international public health concern

Climate change and health: Raising awareness is the key for greener actions

COVID-19: Parliament approves crucial EU support measures

Security Union: Commission receives mandate to start negotiating international rules for obtaining electronic evidence

To tackle climate change, we need city diplomacy

Wednesday’s Daily Brief: migration tragedy in the Rio Grande, drugs report, Torture Victims Day

Privatization as a symptom of health inequity

Who can compel Wallonia to unlock CETA, the EU-Canada free trade pack?

Jeroen Dijsselbloem new Eurogroup president

This company grows crops inside, stacked on top of one another

The US-Mexico trade deal a threat for others, Trump to single out China, Europe

Stage set for successful 2020 Burundi elections, Foreign Minister tells General Assembly

Robots aren’t stealing all our jobs, says the World Bank’s chief economist

Vaccination: European Commission and World Health Organization join forces to promote the benefits of vaccines

How face masks, gloves and other coronavirus waste is polluting our ocean

India’s mega-rich are on the rise

The gender gap of medicine in 2018

When is Berlin telling the truth about the EU banking union?

104 countries have laws that prevent women from working in some jobs

This tool shows you which cities will flood as ice sheets melt

ECB: Monetary policy decisions

Italy solves the enigma of growth with fiscal consolidation: The Banking Union

European Youth Forum welcomes strong stance on human rights in State of the Union

COVID-19: More new virus cases outside China than in, ‘no time for complacency’, says UN health agency

‘Are we ready for the age of disruption?’, Thailand’s Foreign Minister asks UN Assembly

Three ways China can make the New Silk Road sustainable

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

Commission calls on Leaders to pave the way for an agreement on a modern, balanced and fair EU budget for the future

UN expresses concern following wave of street protests in Iraq and elsewhere

Trump’s blasting win causes uncertainty and turbulence to the global financial markets

Shaping the future of democracy in Armenia

The US Congress and European Parliament vote are TTIP’s 10th round’s lucky cards

Marking international day, UN experts call for urgent action to end racial discrimination, in wake of New Zealand anti-Muslim attack

The G7 fails to agree on growth but protects the big banks

EU migration deal welcomed by UN agencies

Mental health: the challenge of society

UN report sheds light on ‘unimaginable horrors’ faced by migrants and refugees in Libya, and beyond

Is a full course lunch, a new Commissioner and 2 million anti-TTIP citizens what you would call a “Fresh Start”?

Halt death sentences on children, UN rights expert urge Saudi authorities

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s