Ironically, what the civilized protests of mainstream parties in peripheral Europe failed to achieve — a relaxation of the dogma of austerity — might come about as a result of the politics of brinkmanship proposed by the Greek radical left. By its blatant rebellion against German-dictated austerity, and by making Greek withdrawal from the euro a credible possibility, Syriza is bringing closer than ever the euro’s chaotic collapse in Europe’s periphery, if not beyond. By insisting that the choice is between new terms for the Greek bailout or a doomsday scenario, Syriza could be creating the possibility for a quasi-Keynesian resolution of the European crisis.
Tsipras might be “impetuous,” as his mainstream adversaries from the center-left Pasok and the center-right New Democracy would say, but he is not irrational. His is a rather sober reading of reality: The austerity plan has become a highway to social hell for his countrymen, and would likely condemn Greece to long years of ruinous depression within a permanent debt trap, and possibly to a breakdown of democracy.
Merkel’s now legendary obstinacy eventually might have to succumb to the imperatives of politics. It is one thing to ignore European Commission President Jose Manuel Barroso’s call for a more flexible economic policy and quite another to dismiss out of hand the powerful message coming from French and Greek voters.
Nor is it a minor political headache for Merkel to have to face an anti-austerity alliance of Italian Prime Minister Mario Monti and the new French president, Francois Hollande. Spain’s capacity to withstand an austerity “cure” that only sinks it deeper into recession must also have its limits.
So now Germany’s finance ministry, the guardian of fiscal rectitude, is considering measures such as using the European Investment Bank to foster growth, issuing EU “project bonds” to finance infrastructure investment and allowing wages in Germany to rise at a faster pace than in the rest of Europe.
The imminent — indeed, inevitable — victory of politics over recalcitrant economics may well be at hand.
Shlomo Ben Ami is a former Israeli foreign minister who now serves as vice president of the Toledo International Centre for Peace in Spain.
Copyright: Project Syndicate