From the cradle of democracy, a lion has roared. It is difficult to overstate the pressure the Greek people have both endured and defied. A country that has already experienced an austerity-induced economic disaster with few precedents among developed nations in peacetime has suffered a sustained campaign of economic and political warfare. The European Central Bank (ECB) — which has only recently deigned to publish some of the minutes of its meetings — capped liquidity for Greek banks, driving them to the verge of collapse. There were stringent capital controls and desperate lines outside banks followed. A country desperate to stay within the euro was told it would be ejected, and with calamitous results.
European Parliament President Martin Schulz, a so-called Social Democrat, whose attitude toward democracy can be generously described as ambiguous, called for the removal of Greece’s elected government in favor of a technocratic government.
It was not bluster. That is what the EU and the markets previously pulled off in Greece and, yes, in Italy: However much justifiable distaste exists for former Italian prime minister Silvio Berlusconi, it should have been his own people who removed him. In Greece itself, the oligarch-owned “free media” acted as a political machine, pumping out relentless propaganda in favor of capitulating to the creditors’ demands. An alliance between Greece’s economic elite and the EU great powers told the Greek people: However tough your lives have been in the past few years, your world will cave in unless you acquiesce. And still the Greek people voted no — not narrowly, but overwhelmingly.
Illustration: Mountain people
The referendum was, of course, a rejection of an austerity program that has unleashed what is commonly described in Greece as a humanitarian crisis. Since Lehman Brothers crashed in 2008, austerity has always relied on the displacement of blame from elites to elsewhere. It was Goldman Sachs who helped the then-Greek government to cook the country’s books to win entry into the euro. It was German and French banks who profitably and recklessly lent to Greece, just as US banks disastrously showered subprime mortgages on low-paid Americans. It was Germany who benefited from being able to export its consumer goods to peripheral European countries such as Greece.
After the crash, Greece was forced to implement measures that sent debt hurtling to 180 percent of GDP, doubled poverty, left one-quarter of Greeks and more than half of young people without work, raised the suicide and infant mortality rate, left many without healthcare and shrank the economy by one-quarter. Precious little of the bailouts went to Greece; instead they went to the European banks that had recklessly lent in the first place. While Germany’s post-war economic renaissance owed everything to debt relief — including from war-devastated countries such as Greece — Athens was denied the write-offs it desperately needed.
As French economist Thomas Piketty has said: “Germany is the single best example of a country that, throughout its history, has never repaid its external debt,” and Berlin is “profiting from Greece” because of its high-interest loans.
The weak euro makes German goods so internationally competitive and has been a linchpin of the country’s recent economic success.
However, this revolt was about something much bigger, and that is why Greece remains in great danger. This is about the very nature of the EU itself. The European project was founded in the rubble of a war of annihilation, genocide and totalitarianism. It was intended to secure peace, prosperity and democracy for the people of Europe.
This dream has become something of a nightmare for a growing number of Europeans. A democratic deficit is unaddressed. The Transatlantic Treaty Investment Partnership is negotiated in secret with large corporations, conspiring to give them the power to sue elected governments in secret courts to try to stop policies they believe hit their profits. The EU treaty negotiated in 2011 effectively forbade any future eurozone government from pursuing an expansionary fiscal policy. Other treaties and directives enshrine free-market dogma in law. Austerity is mindlessly implemented across the eurozone with terrible human consequences: In Spain, too, about half of young people are out of work.
SYRIZA was a revolt against this Europe of austerity and corporate power, in favor of a democratic, socially progressive Europe. Podemos in Spain is part of this revolt, as is Sinn Fein in Ireland. If the referendum had produced a yes, then it would have represented a potentially terminal defeat for this gathering pan-European revolt. Instead, it has now been emboldened.
Unfortunately, the EU elites are not stupid, and realize this. They fear — justifiably — that if SYRIZA is seen to win concessions, the rebellion will spread.
The resignation of Yanis Varoufakis as Greece’s minister of finance is almost certainly part of an attempt to allow them to save face and do a deal.
However, the EU is in a genuine bind. If Greece is ejected from the eurozone, the currency is no longer an indivisible union and a precedent will be set for the ejection of its members. If the ECB abandons Greece, the eurozone’s reputation will not recover.
This is why Greece has bargaining power in its quest for debt relief and for an abandonment of austerity that has already ravaged the country. The EU still wishes to make an example of the country: By forcing SYRIZA to implement policies that will destroy the government, by making “the economy scream” (to quote former US secretary of state Henry Kissinger) until it is ejected from office, or even a disastrous default and removal from the eurozone.
It may still succeed.
And that is why Greece desperately needs support.
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