By Mathew D. Rose, a freelance journalist in Berlin
Monday morning I encountered a word in a number of newspapers that I have not read regarding the European Union for years: Hope. The occasion was the election in Greece. I suddenly became aware of how long much of this continent has been living in what appears to be a never ending-crisis.
Germany may not be experiencing the humanitarian disaster that has been unfolding in Greece, Spain, Italy and many other nations of the European Union. But even here, there is a sense that economically something is going seriously wrong and people are apprehensive. Solutions for anaemic economic growth and deflation have not been forthcoming. The message of the political class has been: There is no alternative to austerity. Yet entering year seven of austerity things have grown worse throughout most of the Eurozone. This permanent crisis with no sign of alleviation does not nurture hope. It produces resignation.
The decision by Greek voters, although overwhelming, was surely not easily made. It was obviously a decision of conscience, and I fear also one of desperation. After six years the Greek people have a lengthy odyssey behind them. They have expiated their financial sins, the Greek oligarchs and political class, the source of this malaise, have not. Interviews with the so-called person on the street in Greece that I read and heard were not only full of humility, but was marked by a self-criticism and a political rationality that I have seldom experienced. There was also marked resentment at how they have been treated by fellow Euro states – their “partners”.
Here in Germany there has been a completely different discourse. Last September the Konrad-Adenauer-Stiftung, the publically financed foundation of Chancellor Merkels political party, the Christian Democrats, held a conference concerning developments in Greece. According to the report by the Stiftung, the Greek ambassador to Berlin at that time, Panagiotis Zografos (purportedly a second cousin of former Greek prime minister Antonis Samaras), explained, that despite the reduction of the average wage by 23 percent, structural reforms and retirement age being raised to 67, the country is optimistic. In his opinion this proved that the Greek people were willing to satisfy the wishes of Europe. Oh, really?
This is the sort of obsequiousness that Germans are apparently expecting from their European “partners”. Zografos seemed right about one thing, the Greeks are optimistic – about a future without its corrupt political elites and oligarchs. This was however probably not what he was referring to.
As it became clear in December of last year that Syriza was politically ante portas, the German government began publicly explaining that Greece had turned the corner and was recovering economically.
One of the principal arguments was Greece’s current account surplus in 2013. This was however achieved due to a major reduction in imports. As Yanis Varoufakis, Greece’s new Finance Minister, noted a year ago, the last time Greece posted a positive current account was “1943 – under the Nazi occupation, when Greeks could not afford to eat (let alone import goods from abroad) but still managed to export a few oranges, a few apples etc.” A parallel that deserves further thought.
Things had gotten so bad, that even Greece’s sycophantic Prime Minister Samaras knew the game was up as the Troika demanded new, harsher austerity measures at the end of last year. What everyone realises in the meantime – except maybe the Germans – is that the economic reform programme of the Troika for Greece has been a total failure. Nothing has turned out as they predicted, such as a tangible economic recovery in 2012. Even the national debt has increased. The Troika’s incompetence has continued unabated, the consequences are being borne by the Greek people.
Maybe Samaras did via the back door what George Papandreou had attempted in 2011, forcing a referendum concerning austerity. By calling for an early election of Greece’s President, he knew this could precipitate elections and political change, should the people will it. Maybe we shall one day revise our opinion of Samaras.
Of course German politicians and media are enlightening their citizens that Syriza, once in power, will do what every sensible German would do: bow to reality and might, accepting that there is no alternative to Germany’s imposed austerity. This is what has been expected of the political class of Europe, and duly delivered: promise change and social justice and then promulgate a programme supporting financial institutions, international corporations, the rich and Germany’s pathological obsession with austerity. Francois Hollande is the most recent example.
In Greece, reality – at least up to now – looks very different. The decision of Syriza to form a coalition with the small right wing party, Independent Greeks (Anel), with which it politically otherwise has little in common, except for its rejection of further austerity, has sent a clear message of where this journey is destined. By Wednesday the new government was putting into many of the measures it had promised: returning the minimum wage to its pre-crisis level; the reinstatement of many civil servants, including doctors; rises in pensions for retired people on low incomes; the halting of privatisation plans; and, maybe symbolic, but defining, the removal of the barricade around Greece’s parliament building, that has protected the nation’s politicians from its people.
What was truly surprising was the decision by Greece’s newly inaugurated Prime Minister, Alexis Tsipras, as his initial official act to lay roses at a memorial in the former German concentration camp in the Athenian suburb of Kaisariani to 200 Greeks communists executed there by the Germans in May 1944 as retribution for partisans killing a German general. I do not believe Tsirpas act was solely a symbol of defiance towards Germany (where the event was hardly reported). It was much more potent. It was a gesture intended for those Europeans, who are suffering under the oppressive and failed financial policy that Germany has imposed upon the Eurozone. The new Greek government is obviously trying to make German hegemony a European issue.
Varoufakis’ statement on his blog following the elections seems to confirm this:
The people of Greece today sent a message of solidarity to the North, to the South, to the East and to the West of our continent. The simple message is that the time for crisis-denial, retribution and finger-pointing is over. That the time for the reinvigoration of the ideals of freedom, rationality, democratic process and justice has come in the continent that invented them.
Most of Germany’s politicians and media have gone ballistic. Suddenly the humanitarian crisis of the past six years has become a unequivocal “success”, which is being threatened by Syriza. Syriza is unwilling to reform the Greek state, Syriza has put the EU in great danger, Syriza courts radical right elements. The decision by Greece not to endorse an EU statement blaming Russia for a rocket attack on the Ukrainian city of Mariupol has caused a further incandescent reaction.
There is no nation in the eurozone that has profited more from the current crisis than Germany. The nation’s ability to balance its budget has just as much to do with dramatically reduced interest payments on its debt as with its misplaced fiscal discipline. The price of its bonds has inexorably declined since the beginning of the Euro crisis, currently enabling it to refinance its debt for almost nothing. Quantitative easing, against which the Germans have railed, has given this downward trend a further fillip. Yields for five-year yields are negative, while 10-year yields are once again nearing the record low of 0.44%. According to the Bundesbank the German government has saved 120 billion Euros in interest payments since the euro crisis began in Greece in 2009 until 2013. Should this trend have continued in 2014, another 50 billion Euros in additional savings will have been added to this sum. Simultaneously the Euro has dropped in value, which for a nation so dependent on exports like Germany, could not come at a better time. That the German government has accepted that its policy would wreak havoc with its citizens’ savings and pensions seems to be of little concern.
Not to be forgotten is the fact that most of the financial support that Greece received from the EU never made it to Athens, but was used to repay Greek debts to German and French banks instead of forcing them to carry a major part of the burden as a consequence of their reckless lending, a ploy that was repeated in Spain and Ireland. The same European governments that rabidly refuse debt relief for Greece today, carry the responsibility for this decision, which would have reduced their current exposure in Greece.
Germany keeps insisting on reforms in Greece, but has nothing other in mind than further weakening labour laws and the social system, some of the greatest achievements in the European political tradition. The real issues, such as corruption, the banking sector and taxing the oligarchs, were ignored by the Samaras government. In the past two years under his administration existing corruption laws have been weakened. These are obviously not deserving of reform in the eyes of the Troika.
This is of little surprise, as Germany’s Finance Minister, Wolfgang Schäuble, who has been the driving force in Germany’s punitive campaign against Greece, was caught out in 1999 accepting envelopes full of cash from a weapons dealer, something he persistently lied about. As Germany had de facto no laws against corruption, there were no consequences and he simply carried on in politics. Schäuble is just another example of the endemic corruption of the political class in Europe. This may well be the crux of the coming conflict between Greece and the EU, not its debts. Up to now, the eurozone has overcome obstacles concerning bailouts, private debt restructuring, banking union and most recently quantitative easing. A solution for Greece’s untenable debt and economic debility could just as well be achieved.
Thus it may not be debt-relief that is truly worrying the European politicians. Not only is Greece challenging German hegemony, but is throwing down the gauntlet to the European political establishment. There has been a growing discontent among EU citizens concerning its political class, Scandinavia being the exception. It is anti-democratic, authoritarian and as already mentioned, egregiously corrupt. Many new parties on the left and the right have picked up on this issue. Syriza appears serious in its intention of cleansing of Greece’s corridors of power that have been transformed into Augean Stables under the aegis of the EU.
Another aspect that could well play a decisive role is Europe’s Social Democrats. They are clearly on the decline, as they have lost credibility as a party of the people. Their natural replacement, ergo their most menacing opponent, will be the new parties on the left. The once predominant social democratic party in Greece, PASOK, could not even muster five percent of the vote in Sunday’s elections. The PSOE in Spain is plumbing the 20 percent barrier, things look scarcely better for Germany’s Social Democrats; while in France Hollande and his acolytes seem set on immolating their party. Even in Britain, where the Labour Party was hoping to come out of the upcoming elections as the strongest party, it has not only lost one of its heartlands, Scotland, to the Scottish National Party, but is facing a surge in England by the Greens, who are adopting an ever increasing leftist agenda and brazenly showing solidarity with Syriza and its programme.
Then there is Germany. With the introduction of quantitative easing last week, which Germany virulently opposed. Ms Merkel and Schäuble have lost face and there has been a good amount of schadenfreude in the eurozone. This is not the sort of thing the dominant power in Europe takes lightly. Its chance to re-establish its authority could well be found in its future dealings with Syriza.
Thus Europe’s political establishment has good reasons to make an example of Syriza and quash it in this incipient phase. Greece may be facing its second Thermopylae. One should however not forget that although the battle was lost and the Greek forces decimated, the Greeks went on to win the war against the apparently invincible Persian forces under their despotic King Xerxes, ushering in not only democracy, but probably the greatest era of western civilisation.
On the other hand, there are politicians in the EU that still embody the spirit of a united Europe and a Europe of democratic ideals, which entails the well-being of all citizens, of all nations. There was, until the financial crisis, a practice in Europe, maddening as it may sometimes have been, to seek and find compromise. There was a tradition of all EU member states being equal. Many EU citizens are simply fed up with the fact that German hegemony has not led to prosperity, but has been exploited to further solely German interests. The question is, who will prevail, Germany or Europe?