Why Syriza Failed

Yves here. While the path for the ruling Greek government to make a deal with its creditors is fraught, it is pressing forward to try to come to an agreement by the next Eurogroup meeting, May 11. Greece has an IMF payment due May 12 that it will find difficult to meet. With the new urgency and the, um, realignment of the negotiating team, the odds now look to favor Greece capitulating even in the event of a default even if the ruling coalition tries holding ground on some of its red lines like pensions. If a default were to occur, it’s not hard to imagine that the IMF and the ECB would make Greece an offer it can’t refuse: the IMF would reverse itself on giving Greece a grace period for its payment if it relented on the disputed issues, otherwise the ECB would have no choice in light of the default to remove or limit its support under the ELA That would force Greece to impose capital controls, nationalize its banks, and issue drachma to recapitlaize them. Both the Greek public and most Syriza members are opposed to a Grexit.

Tsipras continues to send mixed signals on its intentions. He has veered time and time again from making cooperative noises when he encounters resistance from the creditors to making defiant statements to appeal to voters. Consider this section from the Financial Times yesterday that we flagged in Links:

The moves come as senior Greek ministers have publicly acknowledged in recent days that they may be forced to accept economic measures they have been attempting to avoid, a sign they are preparing Greek voters for concessions.

Today, the Financial Times has Tsipras again taking up a defiant posture and saying he might be forced to call a referendum. We’ve said that the likely lead time makes that impossible (as in Greece will almost certainly default before a referendum can take place) and the Eurogroup chief Jeroen Djisselbloem cleared his throat and said pretty much the same thing (which may amount to calling the Tsipras idea a bluff). From today’s Financial Times:

Greece’s leftwing prime minister has warned that he would hold a referendum if international creditors insisted on a “vicious circle of austerity” as the key to unlocking urgently needed bailout money.
Hours after making a conciliatory gesture to Greece’s eurozone partners with a reshuffle of his negotiating team on Monday, Alexis Tsipras struck a more defiant note….

A referendum could lead to weeks of continued uncertainty about Greece’s solvency. A plan by Athens to hold a plebiscite in 2011 was effectively scuppered by eurozone leaders. But some officials also believe it could be a way for Mr Tsipras to win public support for an eventual reform programme.

Jeroen Dijsselbloem, the Dutch finance minister who leads the Greek negotiations as head of the eurogroup, said he did not think a referendum was a feasible option for Mr Tsipras given the urgent need for a deal so that bailout cash can be disbursed soon.

“It would cost money, it would create great political uncertainty, and I don’t think we have the time,” Mr Dijsselbloem told Dutch radio. “And I don’t think the Greeks have the time for it.”

Moreover, as Ned Ludd pointed out in comments today, Greece has retreated from another one of its defiant gestures, that of cultivating ties with Russia:

An offer from Gazprom was “ready for signatures”, and Greece walked away.

[T]he Greek government in the end balked at the Gazprom offer (which was ready for signature on 23rd April 2015) following warnings from the EU Commission that its terms were contrary to European law – i.e., to the Third Energy Package.

I was told by my source that the Greek government could not in the end bring itself to defy the EU Commission on this issue because of its fears that this would jeopardise its negotiations with the EU finance ministers at the Eurogroup meeting on the following day.

Alexander Mercouris’s “source in Athens” may be a Russian diplomat or official at their embassy in Athens, who is aggravated by Greece’s incomprehensible negotiating strategy.

There was no point in making overtures to Moscow if Greece was not prepared to follow them through. It was totally predictable that the EU authorities would object to whatever deal Greece made with Russia or with Gazprom. If Greece was not prepared to defy the EU authorities on this question, it should not have proceeded at all. As it is the Russians must be annoyed at being led up the garden path, while the European leaders have been antagonised and persuaded that Greece’s anti-austerity posture is ultimately a bluff.

And as Ludd noted later:

I think the majority of Syriza was always amendable to being the new PASOK. The path to power, of course, required pretending that a Syriza-led government would be fundamentally different (and to the left of) PASOK.

Since the end goal was always a deal with the Troika, though, PASOK would have gotten a better deal than Varoufakis ever could. “If you can’t bite, better not show your teeth.” ~ Yiddish Proverb.

According to the Financial Times article, it looks like Syriza is now prostrating itself before its Eurozone masters, hoping for a more amicable path to cutting a deal with the Troika.

A well-connected DC reader had submitted this post at the end of March. We’d held off publishing it because we’d wanted him to amplify his central charge, that Syriza does not want to govern. In context, you can infer what that means but we had wanted him to unpack that idea more.

Notice that this critique, which I can separately say with confidence would have gotten blistering attacks from the NC commentariat had I run it then, has proven to be prescient and accurate. The big part I quibble with is calling the Syriza negotiating position “Keynesian”. While Yanis Varoufakis’ Modest Proposal was indeed Keynesian, the Greek government retreated from that in the face of creditor opposition, leaving themselves only with an “austerity lite” plan of volunteering to maintain a primary surplus (which in the absence of fiscal transfers like European Investment Bank infrastructure spending, assures a continued worsening of the contraction). Thus from an economic perspective, what Syriza is fighting over is the right to decide who in Greek society will bear the pain of continued austerity, and the government is working to shift that burden more to the wealthy. A thin gruel indeed.

From a Washington DC insider

Syriza Has Created a Beg-ocracy Based on Fear

It’s been two months since Syiza took power, which is enough time to do some sort of evaluation of their governing philosophy. Here’s what we know. When Alexis Tsipras was elected to head the new Greek state, his government promised two mutually exclusive objectives. The first was to stay in the Euro. The second was to repudiate the policies of austerity and the colonial arrangement of the institutions that manage the Euro. Both policies represented different wings of the Syriza coalition, and Tsipras believes both must be placated.

Tsipras’s strategy was not to pick one of these objectives and stick with it to the exclusion of the other, but to attempt to mesh the two of them in an audacious attempt to transform the entire Eurozone.

Tsipras decided to make Greece a demonstration project. When he was elected, he spoke early on of a “European New Deal”, in a nod to Franklin Delano Roosevelt’s new governing arrangements. And indeed, his early legislative attempts included things like ‘food stamps’ and electricity for the poor. His finance minister, Yanis Varoufakis, talked of European-wide investment in infrastructure to boost overall European aggregate demand.

By governing Greece reasonably well and reducing corruption, along with taking money from those who didn’t need it and giving it to those who do need it, they were hoping to show European elites and voters that another way was possible. With the added boost from more European economic activity, Greece could prosper. Certainly it would grow since its base state is so depressed.

In other words, Tsipras and Varoufakis sought to ‘save Europe from itself’ by demonstrating that the austerity policies peddled by European banking elites were tearing Europe apart. They believe that Merkel gets this, they believe that certain key individuals within the IMF get this, and they think that they can organize enough support within the institutions to muddle through the first few months so they can actually govern. That’s the plan.

And one should have sympathy for this viewpoint. The European project is one of the great achievements of humanity. From the fall of the Roman empire until 1945, European has basically been one giant warzone, with varying degrees of violence. The EU was essentially an American-brokered marriage between France and Germany. This union was then expanded outwards, with a strong social welfare state undergirding peace and prosperity. This is the EU that they want to save, though Varoufakis has basically said that American has no role in the current Euro and that Germany is the hegemon. This misses the critical ingredient that made the EU work, which was a balance of power.

Obviously the specter of Communism provided additional critical context, and it’s no accident that the end of the USSR as a competitive system removed the pressure that tamped down on both nationalism and banker greed. Nothing is inevitable, though, and that turn towards oligarch rule in Europe wasn’t either.

Nevertheless, the EU has been inverted. It is now a set of actors going through a set of austerity policies that in geopolitical terms reflect the Saw horror films, sadistic conditions imposed by bankers and Eurocrats who just enjoy the torture. America is absent. Germany is dominant and malevolent, both corrupt and self-pitying. Nationalism and greed are increasingly rampant, with fewer and fewer institutional controls. It is in this environment that Syriza leaders are trying to negotiate what are essentially fiscal transfers in a structurally deficient currency union that has been organized to suck wealth from the periphery and transfer it to German banks.

The reason there’s so much acrimony in these negotiations is because Tsipras and Varoufakis are operating in good faith and asking for basic Keynesian policies under a technocratic (not democratic) framework. Most of the European institutional actors think that Tsipras and Varoufakis are trying to outsmart and outmaneuver them with leftist cunning, along with their leftist populist allies across Europe. This isn’t really true. Tsipras and Varoufakis have no plan B, they will rely on the sadistic European institutions because they believe the choice is between being part of the Euro with a colonized economy and a thousand years of darkness. They are, in other words, deeply afraid. The irony, of course, is that when Tsipras called for a European New Deal, he missed what made FDR successful. And that was repudiating ‘Fear Itself’ and eventually taking on the bankers directly.

What this means is that Tsipras and Varoufakis are now effectively working for bankers. They do not want to govern with an independent power base, they do not believe in governing along the lines of what they promised unless it is easy to do so, and they are organizing their governing apparatus as a beg-ocracy. They simply do not believe in Greek self-government. It’s been two months straight of negotiations, which looks more and more like begging, and they have had no time to take control of the bureaucracies or to pay attention to what is going on in any area except the immediate political situation. The Greek economy is not improving, because the uncertainty has impeded what little commerce there was.

Governing is not easy, and it’s especially difficult in these situations. And Syriza leaders don’t have experience at it. They are not bad people, and in ordinary situations, they might even be good leaders. But the strategy being pursued is bad and their attitude based on being afraid of the Europeans is worse. This is a fight over power, and Greek leaders simply aren’t willing to advocate for their own people in any serious way. They are deluding themselves about who they are up against. The Greeks will feel dignified for a time with this new government, but that won’t last forever. And then the results will start to matter.

Syriza leadership is now more problematic than the earlier political Greek parties that cut the bailout deals over the past five years, because those parties never promised anything different than catastrophe. Syriza however promised democracy, solidarity, dignity, and the Euro. Now Syriza is in the process of proving that democracy doesn’t work, that the brand of standing up in solidarity against bankers is a fraud. Tsipras’s role is similar in effect to Barack Obama’s role of tamping down populist energy against the national security state and Wall Street in 2008. As Obama did before him, Tsipras is now standing between the people with pitchforks and the banks. The likely fallout of course is worse for the Greeks than it was for Americans, because Greece has so little leverage and it does not have its own currency. But on a very basic level, Tsipras and Varoufakis, just like Obama, are simply unwilling to govern. And that makes them opponents of any real left-wing populist movement.

Greece may still yet exit the Euro, or they may be pushed out of the Eurozone. But by refusing to pick between the two objectives of remaining in the Euro and repudiating austerity, they have lost critical time, bank deposits, much of their primary surplus and even more essential credibility. From the perspective of populists, the behavior of Syriza has been catastrophic. And it’s time to disavow what they have done and let them slink into the long neoliberal twilight from which they draw their inspiration. They had their fifteen minutes. Time’s about up.

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  1. Clive

    Wow. Tsipras and Varoufakis compared directly with Obama in the same sentence. Harsh ! But true. Although I do think that their respective motivations were different. And a good lesson to all of us that good intentions aren’t enough on their own without right actions to back them up.

    1. James Levy

      I have a problem with the analogy if, and only if, Yves et al. are correct in their assertion that the Greek people want the Euro and don’t want to leave the EU. If that is true, then there are not mobs with pitchforks. In 2008-9 in the USA a solid majority wanted the banks punished in some way for their malfeasance (although if you used the word nationalize, they’d run and hide). But I don’t see that in Greece. I see a nation that wants a chance to grow out of its problems and not see people’s lives and health damaged by continued brutal austerity. They think that the EU leaders should understand that and help them out of this scrape. That delusion makes them poor soil for pitchfork populism. Again, if what has been argued to me here is accurate, then they have not squandered their moment like Obama did, because they never had such a moment.

      1. Clive

        This is the fundamental dichotomy — it is, or it very soon will be, time for Greece and its people to work out what is the most important thing because they can’t have both. If you want to be in the Eurozone, you have to take the austerity (there’s nothing I don’t think about membership of the EU which particularly mandates austerity but there definitely is in being a Eurozone member). If the institutions which run the Eurozone require austerity (in Greece’s case) then those are the rules of the club and you can either follow them or leave. Greece maybe thought that it could change the rules. It couldn’t. You only get to change the rules if you have — or take — a position of power. This is your basic Game of Thrones 1-0-1 plotline stuff, I really don’t get how SYRIZA could have been so dumb (arrogant?) as to not appreciate this.

        SYRIZA’s biggest sin in my opinion was to promise all the euro sweetness without the austerity calories. I therefore feel the same way about SYRIZA as I do about those magazines aimed at women (although increasingly men too, these days) with cover stories reading something like “how I lost 20lbs by doing not doing any exercise and eating chocolate”. If you’re desperate enough, you might just buy the magazine before realising that you’ve been had and it’s all a bit of a fraud. You might even call it promising Hope and Change.

        1. EmilianoZ

          They thought they could change the rules because the rules did not make sense. They hoped that if they said it loud enough everybody would see the obvious and act accordingly.

          1. James Levy

            That is my sentiment exactly. They thought this was about policy and money when in reality it is about power and hierarchy. International relations seems to be where good men go to fail and creeps go to be rewarded. Intellectuals like myself find this so distasteful that we tend to ignore it.

            1. MyLessThanPrimeBeef

              International relations exist solely among entities that are not households (presently or in the past).

              We often can not comprehend their acts for they live by a different set of rules.

        2. Alejandro

          One of the more alluring promises of “democracy” was that unjust rules and laws could be changed through so-called legislation and thereby close the gap between the “rule-of-law” and a just society. Even that elusive promise is being “fast-tracked” away…financial intermediation, while expedient, is proving to be a pernicious and slothful substitute for governance.

          1. Cugel

            This whole article is basically silly from one simple perspective. Greece NEVER had the power to “stand up to the Eurozone” and comparisons to FDR are simply absurd. The U.S. in 1933 was the world’s greatest economic power and had fiat currency. The only problem they faced was dealing with a crisis created by stupid policies imposed by the banker class. Once FDR was elected with a Congressional majority there was nothing that could stop him but a lack of vision and will. The bankers opposed him, but he had the power and they didn’t. The reverse is true for Greece.

            As Yves pointed out early on, there was NEVER any chance for Greece to create a better Eurozone unless they could find allies. And they’ve explored every option utterly without success. The European Left is afraid to take up their cause, the U.S. wanted no part of them, they couldn’t convince anyone in the Troika to adopt a long-term sensible policy and overtures to Russia like the Gazprom deal were only that – overtures designed to create a relationship that would lead to a deeper Russian monetary commitment that would act as a substitute for Troika support. Only Russia was never going to do anything like that. The Gazprom deal by itself was small potatoes.

            Now what are they to do? Take Greece out of the Eurozone and shake their fists in rage while the Troika destroys them? That really would be catastrophic. Revoke the ELA, deliberately destroy the banking system, abandon trade with Greece and sit back smugly watching Greece turn into Somalia? That’s the kind of power that Europe has vis-a-vis Greece.

            If Syriza made a mistake it was expecting that the Germans could see the ultimate price Germany will pay for their blindness – slow motion destruction of the Eurozone and revival of Nazism, ethnic wars and economic devastation that will ultimately not spare Germany. But, talking to the Eurocrats is like talking to U.S. climate-warming deniers. Their beliefs don’t touch reality at any point.

            So, what should Syriza have done in this circumstance? Admitted the hopelessness of their mission to end austerity from the start? They would never have been elected in that case, and would never have had the chance to even try. And in truth it was only hopeless in retrospect. The Troika turned out to be more blind to their own self-interest and filled with idiotic delusions of “containment” than anticipated.

            The most true comment in this article is this statement that I have been arguing for months now: “The Greeks will feel dignified for a time with this new government, but that won’t last forever. And then the results will start to matter.” In short, the government will fall, just like PASOK did. No political party can keep the Greek people on the course of endless austerity. Syriza may attempt to rally support behind an attempt to rationalize their retreat, but people who are going hungry are not notoriously trusting. No party that continues the torture will continue to have any popular support. The government will fall and Greece will turn to Nazism next just as Varoufakis predicted.

      2. Clive

        Oh, and I’m not that clever. I wanted to believe that This Time Was Different and that SYRIZA would turn out to be a new approach and have the bravery to truly manage Greece’s problems. So I’ve been sitting it out on the side lines watching events not really wanting to give in to creeping pessimism. Until this week. Yves to be fair has been consistently calling SYRIZA’s mistakes and has, as usual, been proved to be correct. For me, sometimes I wonder if I will ever learn…

        1. Doug Terpstra

          Same here, Clive, especially WRT Yves’ unflinching analysis and the never-ending, demoralizing Greek tragedy, which inexorably, maddeningly ends in unconditional surrender to neoliberal tyranny. TINA reigns for the foreseeable future. So much for brilliant game theory.

          This is a fabulous post, though I’m not sure either about the comparison to the Obama regime. Doing so while first presuming that Syriza has been negotiating “in good faith” gives Obama entirely undue credit, IMO.

          Early on, the World Socialist Web Site also compared Syriza to Obama, though much less favorably, characterizing it as a bourgeoisie party of self-serving pretenders leading a flock of duped supporters meekly to the slaughterhouse. It may be presumptuous to judge intentions in Syriza’s case; ineptitude is equally plausible, but in Obama’s case the long record of bait-and-switch deception is compelling enough. Obama was installed in the big house to placate the plantation as democracy was finished off. And he has performed brilliantly and enthusiastically.

      3. skippy

        Dear Clive,

        Obama did not squander anything… just as Bush attempted to negate Gores environmental leanings by grasping it first in proclamation… only to be read the right act after the fact… dispels the notion of good intentions…

        1. James F Traynor

          I wonder if ‘America is absent’ is actually true. After 2008, and as a very small investor, one wonders

      4. different clue

        This basic weakness has been pointed out before and remains correct with each further pointing-out.
        The Greek people were not prepared to see Europe as their Evil Enemy. They were not prepared to leave the Euro, leave the EU, and leave it in such a way as to Make Europe Pay. They were not ready
        to re-drachmafy, leave NATO and join the SCO, leave the EU and join the CIS, etc. They were/are not ready to face the decades of anti-Castro-style blockade that a hateful EU would impose on Greece for doing such a thing. They were not ready to pay the price and bear the burden of following the kinds of advice which Ian Welsh offered Greece in some of his blogposts.

        Given that, just exactly what was Syriza or any of its personnel supposed to do?

        1. Jackrabbit

          1) Not become part of the farce (“partnering” with the “institutions”?)

          2) Not restrict options or accept bogus restrictions that restrict room to maneuver
          – “No Grexit” was unilateral disarmament (explain ‘Grexit’ and prepare for a referendum)
          – allowing for withholding of bailout funds was arming the other side

          3) Go populist instead of technocratic

          – reach out to the left across Europe: put neoliberalism ‘on trial’
          – highlight the plight of their people, instead of just talking economic numbers
          – demagoguery is not populism: build solidarity instead of resorting to divisiveness (e.g. WWII reparations that could not be negotiated in time to help.)

          4) Show that they are serious about reform

          – make an example of some tax cheats and corrupt officials
          – provide detailed plans to the Troika

          5) Don’t gratuitously antagonize the other side (especially when holding the weaker hand)

          I’m sure others could add more.

  2. gardener1

    We worked in Russia for years. The Russians are absolutely bright and funny and charming and clever, and have many fine attributes, but I did learn that I would never want to do business with them. Nope. Great friends, never business.

    One of my Russian co-workers captained private vacation boats in Greece in season – he had all the licenses etc. He said the Greeks were impossible to deal with. (this coming from a Russian, ha!) At the time we were talking about his recent sojourn to Greece where he told me when he arrived the boat he was supposed to board was not there, nobody knew where it was, there were delays and runarounds, the sailing paperwork and permissions were all in a tangle, nobody knew where anybody else was who could untangle the problems, it was just all clusterflock. Took days to straighten all the while he wasn’t getting paid. He said it happened to him every time he went down there.

    Some people are wonderful people but you wouldn’t want to do business with them. Wonderful is one thing, business is another thing.

  3. Santi

    You have information from Tsipras, straight from his mouth last monday, no need to use the Financial Times filter.
    Also, I don’t think Syriza has capitulated or failed. I’d wait until events develop before making such strong declarations, things are not finished…

    1. Clive

      I don’t think it is useful to characterise the situation in terms of “capitulation” or “failure”. For Greece, the situation is not one of a liquidity problem, it is solvency. We often say here in the NC peanut gallery that the finances of a nation state are not like those of a household. Which is quite correct — so long as the state in question is a sovereign currency issue. But Greece is not a sovereign currency issuer. It cannot buy its own bonds, create The Platinum Coin or borrow in its “own” currency.

      It is therefore in the same sort of position as you or I where our expenditure exceeds our income. It must not only continue to roll over its existing debts but entice new creditors to finance its (up until relatively recently) new debts. If its creditors decide to pull the plug, Greece has not “capitulated” or “failed”, it has merely been unable to persuade potential creditors to refinance it. Unlike you or I, as the Washington DC Insider pointed out with very valid reasons, Greece did have other options. But it either didn’t pursue them or tried variously to flip-flop between pursing them or not pursuing them because they all came with consequences attached.

      I feel desperately for Greece and its people. And personally, I think that the “victory” of the ECB and the other EU Eurozone countries will turn out to be a pyrrhic one because they have demonstrated that they are, collectively, willing to march in lock-step into an oblivion. But it is tomorrow’s potential oblivion and Greece needed to sort out today’s problems. It has not done so, and thus it is where it is. Most of us learned at our mother’s knee that we cannot have our cake and eat it too. Tsipras and Varoufakis seemingly did not.

      1. Santi

        Quite on the contrary, having a small surplus plus a austerity beaten economy, Greece’s main problem is not of solvency. It is that in 2015 they need to return 8.5% GDP in principal and interests of the “bailout” scam they were tricked into accepting to save the big European private finance sector. Stopping these payments, nationalizing the Bank and issuing gradually about a 30% GDP of IOUs would allow them a much better economic situation while using the Euro. It does not matter that much if they are inside it or not. They would probably be better if a reasonable deal is reached, but I don’t think they should be desperate about it.

        1. Yves Smith Post author

          At this point, Greece probably no longer has a fiscal surplus if you back out the items that are not sustainable. If you look at the 1Q budget figures, the government was deferring payments to everyone they could. Reports in comments sections I’ve seen on ekathimerini are to the effect that a lot of people took the election of Syriza as an excuse not to pay taxes (not that the tax paying ethic is great there anyhow, not paying taxes seems to be regarded as perfectly acceptable). And GDP has almost certainly contracted even further, which hurts tax receipts.

          1. OpenThePodBayDoorsHAL

            So non-existent bank loan underwriting in Frankfurt and Paris gets rewarded by squeezing Greek pensioners a little more. Until what, exactly? Until the French and German banks need yet another and another and another bailout by the Wizard of Draghi anyway? Seems to me none of the banks (and their billionaire owners) wants to take their medicine…so the pusher does everything he can just to keep the junkie alive? Just roll the debt over, eternally, until what, precisely, until the last Greek grandmother has starved? What happens when we emerge, heaven forbid, from the parallel Bizarre-O universe of negative interest rates? I mean they think the patient just needs another massive dose of chemo? The patient’s foot is gangrenous, hell take the leg off at the knee and give them some crutches already.

    2. Yves Smith Post author

      Tsipras has repeatedly shown himself to be all hat, no cattle.

      He signed the memo that the Eurogroup presented to him in February. Varoufakis did not negotiate it. It was a diktat. One account says he signed what he was presented, another said he was permitted to change one word.

      Tsipras has repeatedly taken a conciliatory posture towards the Eurocrats and then attempted to walk it back when he got back to Greece.

      He has no domestic support for a Grexit and even a mere default in place will be brutal (see the related post today). He has not developed domestic support for either.

      1. IsabelPS

        Also, in the first few minutes of the interview he said four times “I’m here to tell the truth”. Not a very good sign.

      2. Ned Ludd

        Given the stark nature of the situation, it was incredibly reckless for Syriza to engage in wishful thinking, instead of preparing the Greek populace for a possible default (or Grexit) if they defied the Troika. It made for good campaign speeches, I imagine, but lousy governance.

        Stathis Kouvelakis’s warnings from January seem especially prophetic.

        The test of reality will come very soon. We’ll know whether it is possible to break with austerity and remain within the eurozone. Everything so far suggests that this is not possible. […]

        The concrete outcome is that Syriza is unprepared. There is no plan B. There has been no political preparation of the party, of Greek society, of the people. And this fact is still used as a way to blackmail the Greek population and will undoubtedly be used in the future to blackmail a Syriza-led government.

        When Syriza won the election, Tsipras announced: “Friends, the new Greek government will prove all the Cassandras of the world wrong. [There will be] no mutually destructive clash … We have a great opportunity for a new beginning.” The Guardian, a bit horrified at Tsipras’s ignorance, wrote: “The problem is Cassandra was ALWAYS right.” The curse was that no one would believe her gift of foresight.

      3. Sibiriak

        Yves Smith: “the odds now look to favor Greece capitulating”

        Yves Smith: ” [Tsipras] has no domestic support for a Grexit


        But does Tspiras have domestic support for capitulation?

        I’d say the odds are just as good for a default + referendum–even if the Troika & co. hates the idea.

        1. Cassiodorus

          You have just pinpointed the conundrum that appears time and time again here on Naked Capitalism.

    3. kemal erdogan

      Not finished yet but it is almost certainly going to finish with a decisive victory of EU; sad but true. I am afraid, it is time to end our delusions; all the signs were there for the ones who wanted to see.

      Tsipras and co. seems not fit for the power struggle that real socialists would take any day. That also explains why KKE refused to help them. I was puzzled as an outsider and considered KKE’s position a typical and childish sectarian-leftist sickness, but I also noted what they said at the time. Apparently, they knew that Syriza would not really take on EU.


  4. Lexington

    Stated otherwise, Syriza was never seriously committed to Plan B: default and exit from the Euro zone if they could not negotiate an acceptable compromise on austerity. Their policy therefore fell between two stools. Whatever else the Eurogroup might be they are not neophytes at either diplomacy or negotiation and they probably diagnosed this inherent weakness in the Greek position early on. All that remained was for them to call Syriza’s bluff.

    On an unrelated note it’s been kind of amusing seeing many in the NC commentariat volunteer the people of Greece to be the shock troops who were going boldly storm the gates of the international neoliberal establishment (with Italian and Spanish reinforcements due to arrive any time now, we promise!) only to find that when push came to shove many Greeks weren’t ready to die on that particular hill for the greater good.

    1. Steven

      This IMHO was the game plan all along – just play for time and hope for reinforcements. Realistically, it may be impossible for a smaller country like Greece to come up with a Plan B the voting public would be likely to consider an acceptable alternative. I suspect participation in a currency block such as the euro or dollar is the only option for smaller nations wishing to enjoy the advantages of participation in the global economy. Trying to do so using a currency like the drachma is equivalent to attempting to get reasonable prices on medical care in the U.S. without having health insurance.

      Tsipras / Varoufakis were perhaps hoping Europe’s financial elite would follow the US example following WWII and seize the opportunity to at last free itself from the international neoliberal establishment (read ‘the post-1971 US dollar-based international monetary system’). If 50 years of working for nothing but US promises to pay (“debts that can’t be repaid won’t be”) the threat of being dragged into a nuclear war with a Russia under Putin attempting to opt out of that system should (they were hoping) have been enough.

      But one should never underestimate the ability of an ill-informed, ill-led ‘democratic public’ to avoid the hard task of confronting basic truths about its own blemishes, its more local, immediate oppressors and its place in the larger scheme of things. For those of us who don’t deal with these issues on a regular basis Yves’s call for capital controls seemed at first like a ‘say what?’ bit of technocratic pedantry. It now appears those controls would have been at least a plank in a Plan B, along with keeping the Russian option open.

      It would appear that rather than using Varoufakis as a negotiator employing his talents in recruiting “shock troops (to) boldly storm the gates of the international neoliberal establishment” would have been a better use of his time. The international neoliberal establishment is a plague on humanity – and that includes people in the US where it originated as well as Greece and Europe. (It appears the TPP may be setting the US up for some Greece style austerity down the road.)

      What is desperately needed is a plan to reorganize the global economy along more sustainable lines, one which takes into account both current historical and political realities and, within that context, future possibilities. One of those realities is that the U.S., as a consequence of a century of war and waste pursued mainly to furnish an outlet for the money-creating propensities of its bankers and financiers, is no longer in a position to call the shots for the rest of the world. Following the 1971 collapse of Bretton Woods the US decided to switch from producing things the world arguably needed or at least would buy to producing weapons and (money as) debt.

      That as it turned out was a mistake. The arrogance and egos of the Lords of Finance notwithstanding, real power flows from the ability to make things (including gun barrels) not from the increasingly obvious illusory value of their product, (money as) debt. In addition to a trained workforce it takes energy to make things. Putin decided to assert this reality asking the Money Power in Europe to recognize it (and Russia) and pay fairly for value received. China at some later date may assert its increasing stranglehold over the world’s genuine wealth creating processes and join Russia in asking for fair pay for value received.

      That is the basis of the real ‘China threat’. And, within the context of existing realities, fair pay for value received is the basis upon which the world’s political economy needs to be reorganized.

      1. Lambert Strether

        On reinforcements, I think the time for that to have happened was 2011, with the post-Tahrir Square indignados, who were in essence Europe’s Occupy before there was Occupy. The movement was Spanish, but there were also city-square takeovers in Rome, Athens, Paris, and later, London, and probably other cities I’ve missed. For whatever reason, the movement never took it “to the next level” and fizzled out. If there had been an anti-austerity presence at the electoral or State level, Greece might have those reinforcements today.

      2. JTFaraday

        “What is desperately needed is a plan to… (reorganize the global economy along more sustainable lines, one which takes into account both current historical and political realities and, within that context, future possibilities).”

        That’s oh, so civilized.

  5. John Jones

    Just re posting For Greek readers.

    These three separate quotes are from a highly educated Greek that has followed this crisis closely. I’ll leave them here for those interested in who SYRIZA is negotiating with and why the Troika wont want to come to agreement with them.

    “I am not in agreement with many of the policies of this government. But one thing is certain: the government is attempting to lessen the onerous demands of the creditors and retain sovereignty. The creditors are attempting to “choke” financially this government (and probably overthrow it) in order to secure their power. They successfully removed George Papandreou (as they did with Berlusconi in Italy), so why stop now? Whatever one’s personal opinions may be, one should support the government in not surrendering sovereignty to the creditors. Drop in support of the government would only encourage the creditors to demand full surrender.”

    “Greece would never compete successfully just on the basis of very cheap labor. Bulgaria, Romania, Turkey, etc., would easily beat us in this game, never mind India, Bangladesh, Vietnam, China, the Philippines, and a host of other countries. The only thing that this strategy would succeed in doing is to further contract the Greek economy. But there are going to be increased profits for German companies which now control over 50% of the Greek manufacturing sector.”

    “The current government has not stated, in its submission to the Eurogroup, that opposes such privatizations. Quite the contrary. The SYRIZA/AN.EL government stated that certain of them may be beneficial and that it would pursue them. However, this is unacceptable to Dr. Schaeuble and company. Why? Because they are proposing that that they themselves (with their own functionaries in charge) should be in control of these privatizations (read here: selling them to German interests for crumbs). These negotiations are not about abstract concepts of capitalism. They are about the control of the Greek state.”

    So if one is Greek you should remember this quote and support SYRIZA if only for this. And because the Troika wants them out. That should tell you something.

    “Whatever one’s personal opinions may be, one should support the government in not surrendering sovereignty to the creditors. Drop in support of the government would only encourage the creditors to demand full surrender.”

    Keep SYRIZA in power for as long as it takes. And Keep PASOK, Nea Demokratia and any other potential puppet governments that will surrender sovereignty out. I don’t agree with many of the policies of this government either. But for this alone they should be held in place for as long as it takes.

    1. Clive

      (groan) — SYRIZA, if not surrendered sovereignty, at least perpetuated the previous surrender of sovereignty by ruling out leaving the euro. If you are in the Eurozone you are by definition no longer in charge of your currency and so have given up a key element of what makes a sovereign state a sovereign state.

      It’s kind-a like if I try to shakedown my employer for a raise by saying that unless I get one, I will walk. It is wise to have another job lined up before making that threat (because it makes your bluff more realistic and also covers your ass if your bluff is called). Greece singularly failed to plan for an exit from the Eurozone before beginning negotiations (capital controls, convincing plans for currency issuance). If you’re going to try extortion, you’d better do it properly. I’m not moralising here — I think Greece could have and should have gotten heavy with the IMF and the ECB. They deserve being grifted, given what grifters they are. SYRIZA are the worst sort of grifters though — incompetent ones.

      1. John Jones


        I don’t disagree with what you say. As I said I don’t agree with many of the policies of this government either.

        But they still don’t co operate to the extent PASOK and ND did. If they did they wouldn’t be as hated and there wouldn’t be an attempt by the creditors financially choke them or to turn Greek citizens against them or to overthrow the government.

        There is nothing positive of size that could take SYRIZA’s place right now. Greece would be left with the same capitulates that got them into this mess to begin with.

        SYRIZA still does offer more resistance than the others.Letting SYRIZA fall will only make the creditors happy. If a better party came along then by all means SYRIZA can go. But those better parties are too small and under funded.

        1. Brooklin Bridge

          This sounds tragically familiar to our lessor of evils or “don’t let the perfect be the enemy of the good” arguments in the USA. Syriza: Like Obama, Clinton, etc., but with good intentions. The reality is the same however; Syriza, In the guise of populism, under the banner of anti-austerity, when in fact -good intentions or no- it is cementing austerity in place more solidly than ever, can and is doing enormous damage to Greece in the here and now, even if there is a long term benefit of the whole of Europe becoming aware of just how brutal the Troika and European kleptocrats are.

          Consider the courage or desperation or combination of the two it took to vote Syriza into power and the sense of hopelessness and despondency that will surely result as it becomes evident that more penury and servitude, loss of public assets, etc., is the result.

          If the Troika and the EuroGroup and Germany over play their hand and force Greece into an exit, there may ultimately be some justice achieved by the subsequent likelihood of showing others that it can be done, but it will come at an incredible cost.

          1. M.Black

            I think this is how it should always be spelled in the political context: The “lessor” of evils, from whom one may lease the full inventory of Pandora’s box.

          2. John Jones

            I would like nothing more than for Greece to leave the Euro and E.U but that wont happen just because SYRIZA falls from government. It very likely could forestall that and cause more destruction.

            If Greek opinion becomes divided and not united it will be exactly what the Troika wants. It will make things much easier for them when Greek is against Greek.

            So do you suggest SYRIZA is forced out? Doing exactly what the Troika want? Then what Brooklin?

            As I said previously to Clive I don’t disagree but then what?

    2. Tsigantes

      John Jones, thanks. My only question would be why the person you quote needs anonymity, since these points are common knowledge in Greece, having been written and discussed for years.

      I only add that the German Federation of Industry (a co-partner of German government) has been instrumental in driving down minimum wage in Greece since July 2012. The deal GFI presented to Greece and which is still on the table is as follows: as soon as minimum wage is on par with Croatia, i.e. 320 eur/month before taxes, GFI will invest in Greece through the establishment of German SEZs, offering work contracts of 13 hour days, 6 days a week, no benefits. Negotiations under the previous government so far provides the SEZs tax free status, on government donated sites. Why they didn’t invest in Croatia instead has never been clarified.

      1. John Jones


        I forgot to ask the person if I could quote them and post what they had written.

        I wish they could come here to help educate the readers here. I think many people here would like what they had to say and learn a lot from them. But I think they are far to busy.

        As for why Germany didn’t invest in Croatia instead.
        I don’t know. But I do know they wouldn’t be doing it if it wasn’t of some benefit to Germany in some way.

        Frankly I hope Greeks fight for a return to their labor laws Ones that northern Europeans do or have had. And tell the German industry to take their peanuts and get stuffed.

        But it is easy to talk like that when you are not the one that has starving kids to feed or family or yourself. Or having to buy important medications so you or a child or other family member can live another day.

        My point of posting it was because I am worried it might not be common enough knowledge among Greeks and that they will end up voting against their interests. Like they have done before.

  6. Jackrabbit

    Great summary.

    It seems to me that they should’ve refused to accept withholding of the 7.2 billion Euro of remaining bailout money. If it was withheld, they should’ve refused to make any further payments. Strangely, Yanis had made the case early on that the country was bankrupt and that Greece wouldn’t continue the farce. Yet that’s just what it did. Weakening the country with every payment and every Euro of capital flight.

    They should’ve also shown early on that they were serious about reforms. They could’ve made an example of a tax cheat and/or corrupt politician. AFAIK, they never did.

    A default and possible Grexit seems much more difficult now. So much more that they may have frittered away the opportunity.

    H O P

    1. pebird

      Correct, the €7.2 billion should be treated as on deposit with the ECB.

      FWIW, nott sure cap controls mean much when you don’t have currency sovereignty. Who cares if the Greek banks go bankrupt, that’s the ECBs problem.

    2. Ned Ludd

      Syriza also lost control of €11 billion “in aid earmarked for stabilizing its banks”.

      Euro zone officials said Greece’s track record and the combative behavior of its new leaders had undermined their confidence in whether Athens would deliver what it agrees to in talks with the other countries sharing the euro.

      That drove ministers to make Greece hand over custody of nearly 11 billion euros in aid earmarked for stabilizing its banks to the euro zone’s rescue fund.

      Syriza is incompetent. Their negotiating strategy makes no sense, they aggravated everyone they negotiated with, and they tossed away every bit of leverage that they had.

  7. john bougearel

    Powerful summary: “Now Syriza is in the process of proving that democracy doesn’t work, that the brand of standing up in solidarity against bankers is a fraud.”

    1. basket

      Syriza itself is a fraud, and was one from the very beginning. They made absurd promises they knew couldn’t be kept–and sold out the public to the bankers the first day they took office. People on this board actually thought Lazard was going to help Greece negotiate from a populist position–just days after they raised hell of a Lazard Treasury nomination claiming he’d be a puppet of Wall St.

      The fix was in, there was no democracy. Greece has been a police state for years now.

  8. john bougearel

    That summary confirms what German finance minister Wolfgang Schaeuble said: “Elections change nothing. There are rules”.
    And what the president of the European Commission Jean-Claude Juncker said “there can be no democratic choice against the European treaties. One cannot exit the euro without leaving the EU”.

    Effectively, it isn’t just that Democracy doesn’t work in the rules-based EMU, it simply doesn’t exist. Meanwhile, the EMU can praise Greece for their “endeavors to persevere.”

    1. skippy

      John your ideological blinkers are heir apparent, that decades of diminishing democratic rights, under the onslaught of your preferred ideological preference, having diminished most functionality of said sociological organization, is just a self fulfilling prophecy.

      Skippy.. that said bankers are the least of your woes….

        1. skippy

          Glibertarian responses are such the informative response.

          Skippy… Btw hows your saving the economy cough planet doing with the energy substitute for profit thingy panning out… will it make you financially secure…. [?????].

    2. susan the other

      And Democracy? Has it boiled down to “Whose democracy?” Because one person’s democracy is another’s tyranny. Solve that in a global world and a trashed environment and you are home free. So to carry it out: if ever- larger organizations of people (eq – the EU is an organization of democratic and sovereign nations that just lost all their democracy and sovereignty in a somewhat foggy transition) consolidate to maintain trade rights and benefits, then what happens when some organization of people is deprived of same? The arguments Syriza is making fall short of the eventual outcome of Greek democracy. Because democracy is in the process of global consolidation. You can’t tell me that Varoufakis isn’t fully aware of this.

      1. susan the other

        One question is, Why didn’t the world attempt to consolidate democracy before it consolidated finance? Because it would have been all carrot and no stick?

  9. john c. halasz

    Just a quibble on what “Keynesian” might mean. The claim that running a smaller primary surplus is contractionary isn’t quite correct. There is a bounce of the bottom effect of reduced fiscal austerity and in fact Greece did grow slightly last year with a reduced primary surplus. And the notion of a balanced budget multiplier is standard; by shifting taxes and income from the poor to the rich, who have a much lower “marginal propensity to consume”, an increase in consumption demand can be obtained. Neither of those effects are large and amount to a full recovery, but nor are they negligible. But what Greece can’t do under any circumstances is run any sizable fiscal deficits, since that would blow out the current account deficit in an economy without an export base and without any possible source of external finance. That’s an equally “Keynesian” point.

    Blaming Syriza for being naive, lacking in brilliant “strategy”, or wanting mutually contradictory things, (as if the Troika weren’t similarly inclined in a mirror image), is just unduly harsh. They are caught in a double-bind, not of their own making, and breaking out of that, shattering the mirror, as it were and seeing through the glass darkly, takes more than just “strategy” , based on what can be “rationally” predicted. The real is not the rational, nor the rational the real.

  10. Merf56

    When it’s all said and done Greece will have a fascist style far right wing government. And its people will continue to live in misery with the added bonus of living in fear for their lives as they did under military dictatorship. Well done EU. Well done.. Smh

    1. norm de plume

      And it will be ‘come back Syriza, all is forgiven’

      Well maybe not but in time their blemishes (naivete, strategic incompetence, a lack of real cojones) will fade and their critique of neoliberalism and honest if fatally limited attempt to reform it will provide a touchstone of common sense, however quixotic.

      Perhaps their real importance lies in posterity, where they may be seen as a harbinger for a tougher-minded, more militant brand of opposition.

  11. Greenguy

    I agree with the assessment of Syriza; they are attempting to govern as a normal social-democratic party circa the mid-20th century in a world that no longer allows for the Keynesian policies they preach, especially in a semi-peripheral nation without exportable natural resources. The financial bourgeoisie in Brussels and Berlin are far more interested in return on bonds and loans (which nets them profit) rather than a productive Greek economy with low unemployment. This is not a bug; it is a feature of late financial capitalism. Social democratic Keynesian politics, outside of resource-rich nations like Venezuela, are dead – and even there they are on borrowed time.

    Thus it is indeed true that they could either face the banksters and blow up the EU or simply negotiate in “better faith” than PASOK. As is inevitable in a social democratic party, they chose the latter path. I think the consequences of the former, honest confrontational strategy that accepted the consequences would have forced a further radicalization of Syriza, communalization and nationalization of the economy, and quick exit from the EU – and the illusions of EU membership and benefits, combined with the fear of moving Greece in an outwardly socialist/communist direction by handing the economy over to the workers and away from the bankers, has lead Tsipras et al to blink. They are not radicals; they are anti-austerity, and that is the nub.

    Anti-austerity politics cannot be enough in an era where Keynesian policies are doomed to fail. A government in Syriza’s situation will be forced to immediately choose between capitulation to the financial sector, because it brooks no leftward tilt, or to forgo the benefits a relatively privileged middle class strata receives from EU membership and become a pariah state, nationalize the economy and encourage workers to take over failing businesses and help begin democratic planning.

    Otherwise Syriza is simply playing a game of negotiating strategies, and as has been pointed out before, the austerity parties are far better at it because they have already capitulated and have no ideological or voting-base blockages to doing so again and again.

  12. Jim

    Syrzia’s plan seems to have been to get their way by bluffing, threating to do things – Grexit, turn to Russia – that they were not in fact willing to do. Their bluffs are all being called.

    1. The (Other) Insider

      This was my thought exactly. The only way they were going to have any leverage was by threatening a worst-case scenario – full default and leaving the Eurozone – and my making it clear that they were willing to follow through on those threats. But through their actions they’ve made it clear that they will pay any price to stay in the Eurozone, and the Euro bureaucrats have consequently set an extremely high price for membership.

      If you want to get a concession on rent from your landlord, tell him you’re ready to move out – and have a pile of empty boxes waiting to be packed in the middle of your living room, and the business card of a moving company in your hand. The only way to get leverage in negotiations is by showing that you’re willing to make hard decisions.

  13. Jim

    If the Greeks want freedom from German domainance they must leave the Eurozone. Staying in the Eurozone they are doomed to remain at the bottom of the heirarchy.

  14. Cassiodorus

    So a default and a Grexit would be bad, but SYRIZA is a failure because they’re merely the next PASOK, only less honestly so?

    1. Ignacio

      The road to slavery is paved by fear. the fear of the Apocalypse and TINA: no to Grexit; the fear to govern and use power for what you think needs to be done: incompetence of the rulers.

      Hence all there is left for them is slavery. Accept reality and try to fix the situation, and your citizens to accept freaking reality or bend to external power and let them rule you, at your own peril.

      It’s very clear to me, and should be to anybody else… there are only two ways out of it. You cannot have your cake and eat it too, greeks, time to decide, clock is ticking.

      1. Cassiodorus

        It’s all very well and nice to say “well the Greeks should opt for socialism, because capitalism has ripped them off big time and will reduce them to poverty very soon.” The problem is in defining “socialism” — what does that actually mean for real flesh-and-blood people currently trapped in the present-day world system. Lenin faced this problem, thus the NEP.

        1. ErnstThalmann

          Before NEP there was a revolution and a workers state was created. NEP must be seen in that context. Further, the NEPmen were ultimately crushed by Stalin. So much for the significance of NEP to Communism.

          Greece needs a similar workers state, one which will deal ruthlessly with the compromising scum that would dispose her to the austerity of international capital. A few arrests and the public trial of the faint-hearted might go a long way toward uniting the populace in an attempt to resurrect the country’s self respect. Greece needs leadership and a peoples’ democracy.

          1. Cassiodorus

            The USSR was, at best, a state ruled NOT by “the workers” but by a portion of the intelligentsia. If you want an actual worker’s state, and you’re stuck in that position, you’ve got to deal with the workers as they actually are. As far as I can tell, neither SYRIZA, a political party of professors, nor the nice “socialists” criticizing them, have done that very thoroughly. 21st-century socialism in Venezuela, operating through the misiones, comes far closer.

            1. financial matters

              Syriza does seem to encourage grass roots efforts that address real concerns.

              Stathis Kouvelakis had this to say in a recent Jacobin interview ‘Dangerous Days Ahead’

              “”As for its political project, I’ll tell you something that doesn’t express a personal view so much as a wider search that’s currently taking place. Syriza isn’t the be all and end all. There’s also a kind of “network building” from below within Greek society which has been going on these last years, with all sorts of efforts at self-organization, and of movements that while working at the local level often also establish flexible relations among themselves.”


              This also reminded me of this link from a few days ago. There are the ‘personal grievances’ of the dispossessed (which more of us are becoming) played against some sort of ‘middle class values’.

              The Neoconservative Counterrevolution Jacobin. A must read.

              “”In one of his first post-conversion editorials, Podhoretz argued that the lesson to learn from the sixties was that heady political optimism was more damaging than the pessimism that had pervaded the 1950s. He also rationalized his own political peregrinations by claiming that he and the New York intellectuals arrived at their various positions, including radicalism, “via the route of ideas,” as opposed to most New Leftists, who followed “the route of personal grievance.”

              Podhoretz and the neoconservatives assumed that their political cues were abstract, impersonal, and objective. In contrast, New Leftists — student radicals, feminists, and black militants — responded to a set of particular, personal, and subjective signals.

              Podhoretz thought that nothing less than the soul of America was at stake in his campaign to stamp out the New Left’s undue influence. By the early 1970s, he had declared ideological war against those who had taken up the cause of the Beats, those New Leftists and counterculture enthusiasts who cast middle-class American values “in terms that are drenched in an arrogant contempt for the lives of millions and millions of people.”””

              1. norm de plume

                Absolutely everything Podhoretz (pere or fils) wrote (or for that matter Kristol (pere or fils ..I could go on with Kristols, Feiths, Warmers and lets not even go to constellation Kagan) is conditioned by the primacy of one uniting issue. No prizes for guessing.

                The grass-roots community building you mention in Greece is a good thing, but if it gains any traction and poses any threat at all to the status quo, it will be tagged by your Podhoretzes (or their analogues today in the still neocon infested and influenced MSM) as a ‘bad thing’, driven by ‘personal grievances’. And there is one group of eternally dispossessed people which these nascent power blocs always notice and express solidarity with at some stage of their development – the Palestinians.

                In any case, I don’t accept Norman’s analysis, as if acting out of a sense of (not just personal, but generally shared) grievance is somehow wrong or dangerous, while acting from a set of ideas (they sound harmless in comparison, don’t they?) is a purer, more rarified calling.

                Those carefully, assiduously crafted ideas are almost always carved out of a bedrock of grievance (not to mention a corollary fear) and Podhoretz and Kristol and Wohlstetter and Strauss etc are no exception. Nor indeed was Adolf Hitler before them.

                1. financial matters

                  I think Syriza is working more from a realist heterodox approach of paying attention to various dispossessed groups and trying to better their condition in contrast to the neoconservatives who feel threatened by these groups.

                  But these neoconservatives can harness a certain resonance with some parts of the 99% by playing on various prejudices. As you mentioned above Syriza is acting against the 1%.

  15. Huckleberry

    Whether Syriza’s program is or is not Keynesian seems to me beside the point just now. “Melian” more accurately describes their position.

  16. Pelham

    I’m thinking Syriza should have campaigned on a clear program of at least some relief from austerity while staying in the euro and then made it equally clear from the beginning what they would do if that relief wasn’t forthcoming: either call a referendum to seek further direction from the public or advocate forcefully for Grexit. The Greek people then could have made a more fully informed choice in their last election. Instead, as things now stand, Syriza appears to be weaseling.

    That said, capital controls, nationalization of the banks and a return to their own currency sounds pretty good on the face of it. However, if the people lose heart and opt to knuckle under to the troika, one can hardly blame them. Syriza apparently isn’t up to the task of more visionary leadership, which is what is needed here.

  17. DJG

    The situation of Syriza, which ostensibly wants to reform the left, keeps reminding me how destructive so much of post-modern thinking is, how much it fits my “too clever by half” theme. Varoufakis and Tsipras have the intellectual powers to know that politics isn’t about messaging, style, middle-class comforts, and vague promises. Also, and like Obama, they believe that austerity is for others and not for themselves. I’m reminded of some “classic” leftists who were considered personally quite austere, such as Enrico Berlinguer, Eugene Debs, Pietro Nenni, Sandro Pertini, Dolores Ibarruri, and even, arguably, Eleanor Roosevelt–yet they produced results for the populace. No special features in Paris-Match about them. No columns about wearing shirt tails inside or outside. So there’s something completely wrongheaded about upper-middle-class assumptions and preoccupations as applied to popular movements–no urgency, no sense that results have to be produced, no sense that our over-mediated discourse doesn’t serve the average person. At least Obama has signaled his general old-fogeyness by his attention to golf.

  18. D. Galanis

    Maybe SYRIZA failed but at least they tried to negotiate. They did as much as it was possible.
    Btw Yves, as you can see Yanis was not lying when he said that an agreement was possible.

  19. RA

    All lefties in the world wherever you find them lack backbone. SYRIZA seems to be just Obamaing the Greeks and believing they could change the minds of hardcore conservatives with the power of their words. With that said, the Greek people like most populations around the world are dedicated to their own destruction and prefer the conservative model with only a bit of talk of change so long as everything remains the same.

  20. John Yard

    I think many of the critical comments here about Syriza are – premature. I think the issue of the referendum is critical . Remember several years ago, when PASOK floated the idea of a referendum the response was an immediate coup replacing the government.
    The last think the EU wants is the possibility of popular input on their policies. Remember, the EU is ‘irreversible’. Irrespective of the immediate results, the idea of a referendum is a real threat to the EU model. I think thay will do anything to stop it.

    1. Yves Smith Post author

      They can’t possibly organize a referendum before a probable default or capitulation to prevent said default. Why Tsipras is talking about this now is beyond me.

      1. Santi

        I understand it as “either you ease the noose so that we can pay until June, while we keep talking, or we will organize a referendum after we have fallen into arrears”.

        If the EG agrees to a reasonable solution, it is meaningless; if not, it is what they will do, starting the arrears/referendum process next week, I guess. This is what Papandreu tried to do, and he was removed and substituted by a “technocrat”; same as in Italy. Now I think the solution won’t hold again.
        This fit well with the feeling I got that Varoufakis had either been given as a gambit for negotiation pre a reasonable solution, or else he had retreated to work full time in the “plan B”, after he became convinced that there was no way the negotiation could succeed, rather than the official “sidelining” story.

  21. washunate

    Great read. The coverage in real time of what has been happening has been absolutely fantastic.

    Tsipras had a window of opportunity to renounce fraudulent and unpayable debt as a basic principle of national sovereignty and to offer an alternative vision of what EMU could be. Instead, Varoufakis et al said they wanted to figure out a way to pay the debt, to accept it as legitimate, and not a single other EMU member nation has broken ranks to support a Greek vision.

    At this point. it’s not even clear what the Varoufakis vision is. Infrastructure? What, build more trains between Berlin and Paris?

    This of course leaves Tsipras some plausible deniability to reshuffle advisors and have a change of heart, but it seems pretty obvious SYRIZA’s heart was never in it in the first place to reject the socialization of losses. If they really opposed it, they would have actually done something different by now.

    1. Dana

      If they really opposed [socialization of losses], they would have actually done something different by now.

      What, exactly? The Syriza government has been in office for a mere two months – two months!, while being hounded by Brussels and the Troika from day 1, on multiple, complicated, thorny issues which, it should be remembered, were inherited from previous neoliberal administrations. Creditors, the Troika and the EuroGroup seized the opportunity to exploit Syriza’s weaknesses the very day the party was voted into office.

      It is utterly scandalous that the government wasn’t accorded a minimum of breathing room to settle in and gain its bearings. A good reason for pouncing immediately on the new administration is likely to have been to deprive it of time to conduct an independent audit of Greek finances and the nature of its debts.

      According to the IMF’s very own definition of what constitutes odious debt:

      The legal doctrine of odious debt [maintains] that sovereign debt incurred without the consent of the people and not benefiting the people is odious and should not be transferable to a successor government, especially if creditors are aware of these facts in advance.

      A recent audit of France’s finances revealed that a full 60% of the country’s public debt is illegitimate. Wouldn’t it be interesting to know how much of Greece’s debt is ‘illegitimate’, according to the IMF’s own definition?

      See, also, an informative article by Paul De Grauwe: Are Creditors Pushing Greece Deliberately Into Default?

      In my view, Yves and most commenters on this thread are rushing to conclusions regarding the Syriza govt when fingers should be pointing directly at the political and financial cadres that are exploiting Greece as a means to demonstrate the extent of their power.

      1. MyLessThanPrimeBeef

        sovereign debt incurred without the consent of the people and not benefiting the people is odious and should not be transferable to a successor government

        The same with sovereign debt money – sovereign debt money without the consent of the people and not benefiting the people is odious and should not be the money of a successor government.

        Also sovereign fiat non-debt money – sovereign fiat non-debt money without the consent of the people and not benefitting the people is odious. However, if newly created fiat non-debt money is given (100% of it) equally to the people, it cannot be said the people will refuse it (why would they not give consent?) nor that the new money does not benefit the people.

      2. Alejandro

        “The Syriza government has been in office for a mere two months – two months!”

        IMO, this is an important and often overlooked point. No doubt that the analysis and commentary has been cogent and poignant with the added sting of painful truth…but IMHO “we” have been so conditioned to expect immediate results like with “instant café”, “microwave popcorn”, that ‘we’ can’t discern gestation periods in real time. “We’ll” go and watch a movie like “Gandhi” and three plus hours later come away mesmerized. Then think WTF is wrong Syriza, it’s been three months already, not realizing that the events in that movie spanned over fifty YEARS.

        1. washunate

          I think you’re bringing a general frustration to bear that isn’t relevant to the specific observations being made. I love campfire popcorn and slow-smoked meats. Slow often is better. There’s a whole movement called Slow Food.


          But when you’re smoking meats all day, you can tell after just 1 hour what you are doing. Heck, you can tell before you even start the smoking. You have gathered the smoker and the wood chips and the charcoal. Actually, you can tell even before that, because you have marinated the meat. Actually, you can tell even before marinating the meat, because you either support GMO factory farming of animals, or you support small farms raising animals without the industrial scale.

          I’m not asking Syriza to present me with a finished meal. I’m pointing out that they are still advocating industrial agriculture.

      3. Jackrabbit

        They never renounced the odious debt. They complained but ultimately accepted the obligations, hoping to negotiate the issue later. They chose a Euro-centric approach that was presented as ‘partnering’ with “the institutions”. But such good will has not been reciprocated – just as many critics had predicted. All they have accomplished is shedding of any power to negotiate as they are weakened by payments to creditors and withdrawals from the banking system.

        Also, by “partnering” with “the Institutions” (TPTB) they lost the European left.

        They have been in office for two months but planning for office before that.

      4. washunate

        What, exactly?

        Well, anything. I’m not expecting Tsipras to have single-handedly saved civilization in two months. That’s absurd on many levels, from the time frame to the notion that one Great Leader can save us all.

        But Syriza hasn’t changed anything. They still accept the debt. They are still making payments. They are still doing bizarre cash management things with pensions and local government savings and so forth. They are (publicly, at least) alienating the potential partners in Europe with whom they supposedly want to work.

        They haven’t even offered (publicly) a vision of a different EMU, let alone convinced anyone – anyone! – to (publicly) follow them. It is true that leaves room for secret negotiations, but secrecy can be justified tactically only for a short period of time. At some point, to describe the government as being that duplicitous over a period of months with no end in sight is to describe something other than representative democracy.

        Beyond that, two months isn’t the proper time frame. Syriza has criticized the bailout program for years outside of power. Well, now they’ve been hired. It’s put up or shut up time.

        How many jobs can you have lobbied for for years, and then once hired, say after two months, well, I haven’t done anything yet because there hasn’t been enough time.

        In my view, Yves and most commenters on this thread are rushing to conclusions regarding the Syriza govt when fingers should be pointing directly at the political and financial cadres that are exploiting Greece as a means to demonstrate the extent of their power.

        Yves has had fantastic coverage, and if anything, has been incredibly generous when it comes to affording good will to actors. But I’m most intrigued by the rest of that sentiment. You say we should be pointing our fingers at the cadres exploiting Greece.

        We are. We are pointing out that Syirza isn’t doing that. Syriza isn’t renouncing the fraud. Syriza isn’t reintroducing the drachma. Syriza isn’t pulling out of NATO. They are working on how to pay the debt, not how to reject it. They are appealing to Greek nationalism, not European identity.

  22. docg

    “So in war, the way is to avoid what is strong, and strike at what is weak.”
    ― Sun Tzu, The Art of War

    In other words: always strike from a position of strength, not weakness.

    And this, as I see it, is the fundamental mistake Syriza has been making. Greece is a weak country, currently dependent on economic aid from its Eurozone “partners,” i.e., the oligarchs who currently control both the means of production and the financial system. By casting itself as the representative of Greece alone, Syriza is aligning itself with weakness and thus putting itself at the mercy of its opponent. Thus, from the start Syriza has been in a losing position and, if things continue in this manner, is doomed to lose. If Greece defaults, then it will faced with economic disaster at least as bad as any austerity program of the past. If Syriza bows to the “institutions,” and accepts a return to the reviled austerity program, it will have broken its political promises, be mocked by the opposition and soon be replaced.

    Is there some other course to be taken? Yes. Because Syriza not only represents Greece, but as the only genuinely leftist government to be elected in recent years, it represents the entire European working class as well. Greece is weak. But the workers, when organized, are strong. And who better to organize the European working class than Syriza? With the workers behind them, Syriza would indeed be in a position strong enough to stand up to the oligarchs behind the “institutions,” and implement the goals so eloquently expressed by Varoufakis, along with so many other progressive economists and activists the world over. All that’s necessary is to expose the truth behind the smoke and mirrors of a “financial crisis” which is in point of fact actually a human crisis. In the words of Greg Palast, “structural reforms” are simply “a euphemism for worker-crushing schemes.”

    Of course, as I’ve written elsewhere, “The only group that’s remained passive throughout this whole fiasco is labor.” Motivating the huge European labor force to take action would be no small task. But as I wrote in the same blog post, “an effort to organize workers on an international scale might be far less difficult and far less time consuming than it might seem. In fact the time seems ripe for it.” For more along these lines, see http://amoleintheground.blogspot.com/2012/06/day-of-rest.html

    1. JTFaraday

      What’s the difference between the inverted fascism and fascism fascism?

      Mobilization of the population. Be careful with that thing.

    2. norm de plume

      ‘“The only group that’s remained passive throughout this whole fiasco is labor.”

      Well, they have already been suborned, where not totally routed. Like the media. Like the universities. The nation state is capital’s final frontier, at least the weaker ones, and Greece is the first major battle ground for that war, after several skirmishes, with the trade pacts forming a formidable second front with which to restrain even the stronger countries. The nation state’s natural allies such as workers (the majority of its citizens after all) have had their collective power destroyed by the unemployment and income theft of a generation of neoliberalism, given intellectual cover by said control of media and institutions.

      When Spain was threatened with fascism in the 30s, people from all over the world flocked there to help the socialists, and labour was in the van of that movement. That simply could not occur in this hyper-connected day and age.

      It must be noted that the leftists, while of noble intent and brave as all get out, were hopelessly disorganised and played like violins by Stalin and others. It was all very inspirational, but it was a failure, followed by many years of the General. Capital was a necessary but not sufficient player back then, it seems to be both nowadays.

  23. Jim

    The comment by Washington Insider is one of the best ever on NC.

    Would like to hear more of his thinking about the evolving legitimacy crisis in our own capital.

    His message that “they do not want to govern with an independent power base,” that Syriza is in the process of constructing a governing apparatus as a beg-ocracy–seems right on target.

    All of the New Deal social democrats on NC should reflect on the nature of this failure–the refusal to consider genuine democratic populist structures for the State–and the acceptance of the erroneous assumption that all that is needed to solve our political/financial/cultural problems in 2015 is to simply harness the existing state burearcracy as an instrument of ameliorating gross social inequities.

    Such narrow thinking is no longer adequate.

  24. sandra yolles

    Listen. The comparison with Obama is really off base. Obama immediately put Rahm in charge of his office, and
    shut the Democrats (if there were any) or progressives from his administration. They worked hard on marginalizing us and keeping us quiet while they shifted their priorities to bank friendly, finance friendly and corporate friendly criminal actions. Particularly they did not protect citizens from bank crimes re forclosure, although they had a policy in place to do so, they did not enforce it, and opened the door for banks to subvert it and continue to commit crimes against thousands, hundreds of thousands, How many? Obama put the healthcare policy making in the charge of corporate people and closed out policy makers who spent their careers working on the issue. And now TTP and TTIP. The talk and the actions were never connected. Even in the talk, Obama never promoted progressive policies except in his public speeches, blah blah, but never in the work of government. In other words he was completely deceptive to keep us quiet. Period.

    1. Mark P.

      All true, and that was why his masters chose, funded and sculpted the empty shirt that he was into a presidential candidate.

  25. al-x

    I am sad, about this outcome. But I also wonder: Did the Syriza Crowd realy think, that Mr. Scheuble, german government, the EUROcrtaz are realy intrested in the wellbeing of the avarage, european citizen?
    Thats – naive.
    Most likely Mr. Scheuble is an agent of Fraport and the like.

    I am a fan of Yanis Varoufakis. And it hurts me that he seems to be this stupid.
    Seams like he is a good economist, but no good dealmaker.

    ps – i am here to emproove my english

    1. Ben Johannson

      I’ve wondered this very thing from the moment Varoufakis and Tsipras ruled out leaving the eurozone: can they really be so naive as to think the eurogang would work with them? Apparently they were.

    1. MyLessThanPrimeBeef

      No anarchist attack worries for me, but I avoid dining out as much as possible – saves money and I get to see what I put inside my own no-backup-available corporeal self

  26. Rosario

    I really don’t think it is appropriate to appraise the problem in terms of the failings of a political party like SYRIZA at this point, particularly in the context of Neoliberal Capitalism and, well, really all Western politics at present. If anything SYRIZA has exposed the inflexibility of Neoliberal ideology no matter how inept or possibly corrupt the party actually is. Neoliberal Capitalism as it progresses has bipolar power. Let us consider elderly Greek pensioners at the bottom (lacking the empowerment of Capital) and Greek shipping oligarchs at the top (flush with the power of Capital). SYRIZA occupies the dead space between with all its nuance, ambiguity, and most importantly ineffectiveness. Because of this I have come to think it strange that so much intellectual energy is put into critiquing their approach. As if it would have happened any differently with people occupying the Troika running the show? Rather than a unanimous condemnation of the entrenched and inflexible elite on one pole it has become a game of trying to ingratiate the rich dinner host while pocketing the silverware. Consider the riots in Baltimore, the “divine violence” being exercised is beyond the responsibility of any person or group. Persons of color living in Baltimore are subject to social and political forces far beyond their control. The chaotic outbursts of violence are a natural result of this. A similar situation exists for a Greek citizen WRT Capitalist forces in Europe and to some extent SYRIZA’s power as representatives of Greek citizens to this power. So why, in the light of SYRIZA’s “failure” (more like inevitability) is the discussion centered on the shoulda, woulda, coulda of their strategy rather than the daily failings of Neoliberal Capitalists (i.e. bankers, Troika, IMF, etc.)? This appears to be a great deal of wasted anger.

    It seems like most posting on this forum are coming to the conclusion that the fundamentals of our supposedly democratic institutions are at best ineffective and at worst engines for alienation and inequality, does this not put into question the need to critique political parties as structures to be taken seriously? Hasn’t the discussion become far more radical than we may be willing to admit? This brings me to possibly one of the best speeches related to inequality, Malcolm X’s “The Ballot or the Bullet” (http://www.edchange.org/multicultural/speeches/malcolm_x_ballot.html). It remains true to those living in Baltimore and Greece alike. Just change a few nouns (elite/1% for white man, etc.) and the story is similar today for most of the population on this planet. Time to make this a matter of right and wrong. Time to choose sides. There are few reasons for liberal-democratic political critique when there are no liberal-democratic politics.

    1. Marko


      If the only thing Syriza does is make more people recognize that the destruction of an economy via neoliberalism is a feature of that paradigm , not a bug , they will have served a useful purpose. This is the terrorism people should defend themselves against. By comparison , ISIS is the Easter Bunny.

      1. Jackrabbit

        When was the last time that you heard a rant about neoliberalism from the self-proclaimed marxist Varoufakis?

        They seem to prefer to fan old flames (German occupation during WWII) rather than raise awareness of neoliberalism and solidarity among people.

        That should tell you all you need to know.


        PS It seems that they made a case for Europe only to justify a negotiating stance that was sure to fail (Yves and others have been raising questions about their approach for months. See, for example Ned Ludd’s comment above)

        H O P

        1. Jackrabbit

          Note: The Reparations issue would take months to resolve (maybe years) so it was just PR in the context of the current negotiations.

          1. norm de plume

            Disagree. How can it be just PR – in the context of these negotiations it serves (or should serve) as a constant reminder of the hypocrisy and greed of Germany, which after all didn’t simply renege on its obligations but murdered many thousands of innocent people. If it is said that ‘that wasn’t ‘Germany’, that was an evil elite class of non-representative leaders’ then why couldn’t Greece say that its debt was engineered not by ‘Greece’ but by a non-representative class of banker-friendly oligarchs and functionaries?

            Is German behaviour from WW2 all just too long ago to be pertinent now? If so, would Greece be within its rights to stall for another 30 or 40 years? Is there a statute of limitations on debt? Is some debt more equal than others?

            The unwelcome light this comparison shines on Germany’s holier than thou stance is the main reason it should be emphasised, not discarded. And as for taking years, why not. The longer its in the spotlight, the better.

        2. Marko

          ” When was the last time that you heard a rant about neoliberalism from the self-proclaimed marxist Varoufakis? ”

          Well , if you don’t insist that he actually uses the term “neoliberalism” ( a term which the average world citizen couldn’t define ) , about a week ago.

          Here’s how he described the Troika reform plan , which he claims “failed”:

          “The previous reform program, which our partners are so adamant should not be “rolled back” by our government, was founded on internal devaluation, wage and pension cuts, loss of labor protections, and price-maximizing privatization of public assets.”

          That sounds like it’s describing neoliberalism to me.


  27. EmilianoZ

    The Greeks had a strategy. They would be the first slave to revolt. By doing so, they would give the example for other slaves to follow. If enough slaves would rise, all together they would overwhelm the masters and negotiate better working conditions. Varoufakis is our own modern Spartacus. But, unlike Spartacus, he did not find like-minded fellow slaves to follow him on the road to dignity. What he found were grovelling slaves, vying with each other to be teacher Schaubble’s pet. Look, look! I can tighten my belt even further! They were the first to put him down. For the slave who wants to revolt, there is no bitterer foe than the slave who wants to grovel.

    1. Yves Smith Post author

      The history of slave revolts in the US is that the very few slaves joined and the ones that did were caught and killed in a particularly brutal manner. There are very very few successful or even semi-successful slave revolts.

      1. Marko

        Yep. Haiti has paid dearly for their historic uppityness , and they’ll be paying for decades , if not centuries , to come.

        1. Lexington

          Not sure if that was intended to be sarcastic, but Haiti is the exception that proves the rule: it is was the only instance in which a European power was defeated by slaves, and arguably the only unambiguous case of a successful slave revolt in recorded history.

          Unfortunately history teaches time and again that wooly headed romanticism is no match for firepower, organization and resources. All it has ever done is get a lot of people killed to no good end.

    2. Lexington

      Varoufakis is our own modern Spartacus. But, unlike Spartacus, he did not find like-minded fellow slaves to follow him on the road to dignity.

      So you looked at Veroufakis’ Paris Match photo shoot and said to yourself “This is the new Spartacus!” ?

      I doubt Spartacus himself would have commended the comparison.

      1. norm de plume

        Oh for goodness sake. YV comes from a wealthy family, what’s he to do, don sackcloth? The fact that someone like him has taken up the cudgels for those less fortunate should be seen as what it is, a rare and praiseworthy exception to the rule. All this commentary that it wasn’t prudent or wise… I actually find it rather refreshing, almost endearing that his own perhaps politically un-savvy mind obviously doesn’t work like that.

        And also – Spartacus, being someone you would imagine with an ability to see past a book’s cover, would walk right up and shake YV’s hand. Just as he would with say, Cleisthenes.

        Spartacus was lucky in that his slaves weren’t weighed down by a lifetime of TV, 40 years of neoliberal dogma and a decade of iPhone ownership.

  28. Jackrabbit

    I see two main take-aways:

    1) Beware of Leaders bearing ‘gifts’ (unrealistic promists)
    Syriza promised the ‘gift’ of a painless end to harsh austerity (no Grexit). The appeal of their middle-ground approach trumped logic. This is very much like Obama’s promises in 2008. Middle-ground approaches are simply cons.

    Along those lines: Varoufakis’ much publized marxist leanings seem designed to disarm as much as Obama’s blackness and Hillary’s grandmotherlyness.

    2) If you are head of government for a troubled sovereign, and you sincerely wish to see results, HIRE YVES!!

    1. Yves Smith Post author

      No, I would not be a good choice. Distance makes seeing big patterns a lot easier. But a variant of 2 is make sure you have and really listen to house skeptics.

      Syriza looks to have become a captive of the compromise it was willing to make to get elected. It initially campaigned with a more radical posture, then moved to the center as it got attacked by the establishment parties and made it clear it was pro-Eurozone, anti-exit.

      1. Jackrabbit

        I don’t know enough of the recent political history of Greece to say if Syriza leadership has been incompetent or traitorous. Ned Ludd’s comment (above) sure seems damning, however, as does the negotiating strategy that leaves them now more at the mercy of “the institutions” than ever. When failure was not an option, somehow they managed to do just that. And, of course, cui bono?

        1. MarronBulldog

          I can’t believe that Syriza leadership has been traitorous, and I don’t think it’s fair to suggest that. By no means do Tsipras or Varoufakis resemble Quisling or Marshall Petain. As for incompetence, I would put it this way: Syriza leadership is inexperienced, and some of their approaches to negotiation have seemed misguided, but they did not create the Greek predicament and there was never any reason for confidence that they, or anyone, would be able to conclude it successfully. If they thought they could resolve it, well, they had yet to learn the lessons of experience.

          1. Jackrabbit

            Yes traitorous may be too strong a word.

            I think the Greek and European elite want Greece to continue with the Euro. They are not traitorous to these interests.

            I’d guess that the middle class is divided: told of the need for the euro while sensitive to the suffering of the poor/unemployed.

            To me, Greek leaders resemble Obama, who claims to be progressive and for ordinary people but fashions Oligarch-friendly policy. Their slowness to reform and bungled negotiations have only strengthened Greek oligarchs and hardened Troika demands. Like Obama, they campaign/speechify to the left but govern in the center. They employ divisive demogoguery as a substitute to genuine populism and offer crumbs to warehouse discontent instead of real change (they now pay the poor some small amount while they ‘partner’ with ‘the institutions’).

    2. Jackrabbit

      In addition to the media expose of Varoufakis as marxist, the other things that stand out in my mind (in a bad way) are:

      – the failure of this marxist economic technocrat to highlight the plight of his people at the news conference after the preliminary hearing (marxist is to socialist as theorist is to practitioner?)

      – his cavalier tweet: “they hate me and I welcome their hate”. This seemed designed only for self-gratification and as an unabashed play for the sympathy and support of the Greek people (who are now facing a worsened state given that Syriza/Varoufakis has failed so completely and has no ‘plan B’). It is also seem strange coming from someone who had staked everything on a pro-European solution. Wouldn’t it have smarter to say something to the effect that these ‘haters’ had failed Europe?

      1. /L

        FDR said that in the famous speech just before he was elected for a second term. As he also said; they did meet their match in the first term now they will meet their master. The White House is a significantly different power plattform than the Greek government. To be that stagey when you only have a big hat and no cattle is meaningless,

        “We know now that Government by organized money is just as dangerous as Government by organized mob.”

  29. Fred

    Since this started, virtually all of the media coverage has focused on parsing the framing of the negotiations, the equities of the two sides, and handicapping/critiquing the negotiation strategies of the Greeks.

    It is not my purpose here to disagree with any of this as I’m about to do some of this myself. I can’t help but notice that the Troika has not terminated the negotiations and walked away. Creditors tell debtors “to go burn in hell” all the time. Sometimes this causes the debtor to comply. But if not, the creditor is okay with letting the debtor burn.

    So why doesn’t the Troika tell the Greeks to go burn in hell? I don’t have a specific answer, but I can infer that forcing the Greeks to comply is far preferable to the Troika than letting them burn.

    1. Yves Smith Post author

      They have in effect told Greece to burn in hell. They’ve sent an unambiguous no the issues that Syriza has said are red lines, the most important of which are not cutting pensions and improving labor conditions (higher minimum wage, job support, stronger union rights). Because this process is politicized, they want to show their voters they gave Syriza every opportunity to come around

      1. Fred

        What I meant by the Troika telling Greece to go burn in hell was for the Troika to state that under no circumstances will the Troika give Greece any more money – the spigot is turned off – the negotiations are over – go burn in hell. But all the Troika does is complain about the Greeks’ lead negotiator. It is just peculiar to me that the Troika is willing to continue throwing good money after bad.

  30. Andrea1

    Chipping in on this, hmm. Outsider.

    I read various versions, there have been many, of Syriza’s political platform, in speeches and docs, of their aims, propositions, and promises, both before they were elected, and after. There are several versions trans. to Eng. (I don’t read Greek), afaik, no definitive document exists, linking one thing or another would be cherry-picking, and not an overall review, not competent to do that. Google “Syriza platform” and the like.

    What I want to address is a basic misunderstanding.

    Syriza is always called a leftist party, or radical-left, and so on. Certainly, many of its aims and promises were slanted towards a perhaps installed socio-democrat functioning and/or ‘humanitarian’ stance, such as not cutting pensions, treating immigrants with dignity, and offering free (or close to) health care. (These are all admirable aims.)

    Syriza governs in a coalition with ANEL (independent nationalists), which accounts for some of their stances. The Communists refused to join Syriza.

    They manifest a clear nationalist stance – as in for ex. refusing privatizations (or wanting to manage that themselves..), not letting the Troika come in and supervise. (Again, OK…)

    This does not a ‘left’ party make. And certainly not radical left.

    The present Greek Gvmt. resembles a Citizen Movement, which, typically, within an instituted order champions for more advantages for a certain group(s), or all. No propositions for reform are made, except for, on occasion, taxing the rich, relieving the poor of burdens, extending state benefits, favoring nationals, getting more parking spaces, protecting trees, or whatever. That is what Citizen Movements are all about. Here (Switz.), they often get some grip, and then fizzle out.

    The Syriza platform never mentioned, as far as I read, I may have missed things : The Church, largest property owner in Greece, the Army and Military expenditure (highest in the EU according to some calcs, the money goes to Germany and GB), Finance and taxation (beyond the trivial about tax collection, outside of the EU mess), land registry, Energy (Greece is in a terrible position here, that should be acknowledged pronto), the Merchant Marine, “Corruption” – aka instituted priviledges, e.g. for doctors. Or foreign policy, e.g. relations with Turkey, or Macedonia. Non-exhaustive list.

    This is why Syriza are Europhiles: they are acting within a laid down order, and their moves are constrained by that, just as Swiss citizen movements act within the strictures of Swiss politics and law. (See also for ex. Occupy in the US.)

    Europhilia – championing the EU, wanting to stay in it, lauding internationalism, even in some measure globalisation except when one has to decry it, European cohesion and untity, etc. – is a stamp of the faux-left, such as French Socialists (now in power with Hollande.)

    OK this comment was slanted in one direction, and leaves out the sadism and of the EU, the economics of the debt, and the positive role Syriza may yet play.

  31. Stefanos

    Lots of good and valid points in the opening post and comments.

    Varoufakis and Tsipras don’t have the personality and psychological makeup that’s needed. They thought that by beating around the bush and talking a tough game, they would cower and outsmart Schlauble and Merkel.

    The one meaningful course of action, which is to pave the way for a dignified exit (get buy-in from the public; short and medium term planning and management of scarce resources) while making the crucial reforms (bureaucracy, corruption, law, etc.) was never seriously contemplated. Instead, their plan was to get something for nothing. Very stereotypical greek, indeed!

    Greeks aren’t ready to free themselves from EU’s suffocating embrace. The vast majority of them are still too scared to risk their little cushy jobs that pay peanuts, because they wouldn’t know how to survive in a different environment (in fact, the ones who could adapt have left already). It may take a generation before they collectively find the courage to do something about it.

    1. Andrea1

      Yes… a more general comment.

      The problem is that the Greek new-elected act (perhaps clumsy or canny, or both, idk) within a frame that is laid down, and that they *accept*, but say they want to change or reform. From the inside.

      Can be a good strategy on occasion, e.g. a Golf Club who wants to clean up its finances, spend less on water, refurbish the building, up member contributions, and have more pretty ladies invited to the 4-monthly buffet, which can be attempted, and have some consensual positive results, or in the case of opposing povs, can be discussed etc. All within the frame of US laws, customs, culture, the love of Golf, a felt need adjust, adapt, survive, do better, flourish, promote Golf, etc.

      International geo-politics is at a different level, the rules are different, the stakes other, the barriers to be overcome of a different nature, etc.

  32. H. Alexander Ivey

    Ouch! Nothing like a slap acrss the face or a splash of cold water first thing in the morning. I don’t know whether to laugh – a DC insider who can talk in plain English about how politics is done, or to cry – his analysis looks spot-on to me.

    Thanks Yves for the posting, this is why I read NC every day at breakfast. It wakes me up.

  33. JohnB

    Ouch – hope this doesn’t burn too many bridges.

    To give a more sympathetic analysis (though the highly critical analysis is needed and very valuable), this seemed like an attempt on behalf of Syriza, to make the best of a bad situation – where their overoptimism of the potential for the EU to engage in sensible recovery policies, led them down a path that made their own situation worse (but where the results were hard to predict, given their viewpoint).
    It was worth the try – but maybe now is the time to abort and eject; it might carry an inhuman cost in the short/medium-term, but we just don’t know what the EU is going to turn into after this – it could eventually be good/worthwhile, or be seriously bad.

    The takehome point from this, is perhaps that the EU doesn’t deserve optimism. The only thing to say to its credit, is that its pursuit of destructive NeoLiberal policies, is probably mainly down to political dysfunction and mass-cognitive-bias, rather than malice.

    It’s very hard to plot a chart of the EU’s future course, based upon the present – but attempting to, in a realistic manner, is probably a good task to try and accomplish, to see whether the overall project is still worth being a member of or not – and whether exiting it is worth the severe human cost, and wider political cost – versus subsuming to a largely NeoLiberal political framework for another generation or two (three?).

    If there’s anything naive/misguided about my viewpoint/analysis/pessimism here, I’d be very glad for people to call me out on it and change my mind :)

  34. plantman

    Yves, has been right from the beginning, and I have been wrong.
    I always thought Tspiras was lily-livered, but I believed in Varoufakis.
    I was wrong…neither has the courage of their own convictions or the guts to lead.

  35. MarronBulldog

    In my experience, no negotiation was ever concluded and no deal was ever closed until it absolutely, positively had to be; and negotiations with multiple parties on one side (the “Troika”) were especially difficult, because of conflicts between such parties that have to be resolved on line. So I do not find it surprising that these negotiations have taken so long.

    However, for one side to demand the removal of the other side’s lead representative is a considerable step beyond what is normal. It is not merely a sign of disagreement; rather, it is sign of disagreeable behavior charged to the fault of the negotiator asked to leave.

    In a previous comment, Yves opined that this negotiation is being conducted by negotiators whose abilities fall in the range from bad to mediocre. I absolutely agree. But I an not sure that Talleyrand himself could have done much better with these issues and these time limits.

    Yves also opines that this will end when the Troika makes an offer that Syriza can’t refuse. That seems like a safe bet to me. The type of agreement Syriza/Greece is seeking is what I would characterize as a composition with creditors, to operate as a compromise and settlement of old obligations in exchange for the assumption of new ones. Delay in concluding an agreement like that serves the interest of the creditors, as long as the debtor is continuing to perform its obligations under the old agreement. So don’t expect a resolution until Greece runs out of euro’s to pay obligations coming due. May 11 looks like a likely date if Greek default is inevitable on May 12, but if Greece can make payments awhile longer, the Troika can afford to delay awhile longer.

    1. Jackrabbit

      TINA moment coming soon?

      Looks like default (and risk being forced out of EU – which they seem determined to avoid) or capitulation to most of the Troika Institutions demands. Greece NEEDS the ECB/ELA, bailouts, and trade with Europe more than ever. Capitulation would be explained via the ‘mechanism’ of TINA (“There Is No Alternative” – a manufactured crisis that presents the non-choice between disaster and hardship). What does capitulation look like? I can’t say for sure. Doesn’t have to mean total failure. Syriza might be thrown some bones. But its a safe bet that it will be a far cry from what they promised.

      One thing that came to mind (and I mentioned at NC days ago) is a sweetheart deal regarding German WWII reparations. I’d guess that has been a brewing issue for years but has always been on the back-burner. It made no sense for Syriza to bring that up during negotiations because any reasonable settlement will take months to work out. But now that it is conveniently ‘on the table’ Syriza could settle that for pennies on the Euro given Greece’s urgent need for cash. Maybe, for example, such a ‘deal’ would save pensions (for a time).

      H O P

      1. Jackrabbit

        I should add, though it should be clear, that my remarks regarding the potential for WWII reparations settlement is speculation. But opportunistic taking advantage of people in a weaker position is part of the neolibcon mentality. Don’t let a crisis go to waste.

      2. MarronBulldog

        WWII reparations from Germany? I can’t know, I just can’t know, but anything is possible.

        The outcome is more predictable than the path to it.

  36. wist

    I enjoyed the original article, the many posts and the discussion. I don’t want to appear to be a buffoon and I may be “off topic” but few if any mention the structural situation in Greece. Greece is plagued with patronage, cartels, corruption, graft, bribery, lack of modernization in their governmental practices, etc. etc. It appears that there is a giant vampire of elites and politicians that want a system of status quo so that they can continue to milk their moneys and likely not pay taxes. This pillaging by most professions/politicians goes on without reform and is embedded in the system. This continuous blood sucking by the upper ends of society empowers the lower sections to justify tax evasion. I disagree with the idea that Syriza has had too little time to govern. I think the PM and the FM could have cut back on interviews, jet-setting and should have come in with an aggressive reform within the first days of governance. Syriza had plenty of time to develop a game plan before winning the election. This would have included immediate legislation to clear tax backlogs, determine tax cheats, delete redundancies, pass reforms, purge ministries, evaluate institutions, etc.. Instead, they went out of their way to slow roll the negotiations and demonize the “technocrat” inspectors/Germans. One can take a look at the rankings from Transparency International or review a lot of diverse data points to understand that Greece has a structural system that is DOA. This is a problem that has to be cured by the Greeks. Without bold internal steps, Greece will be a ward of the EU.

  37. Mario Medjeral

    At least we obtained a confirmation, through Syriza’s failed attempt, that the EU is not open to reform, definitely not via an open debate.
    Germany dictates policy and the members are imprisoned through debt and a kind of ‘Stockholm syndrome’. (The last was obvious in the last Riga meeting where ministers from austerity damaged countries throw personal insults to Varoufakis).
    Greece will not be the final factor to de-stabilize the EU, but Ukraine has the seeds to do the job.

  38. -jswift

    I wonder if this sense of inevitability takes too much for granted — even if Syriza signed off on the eurogroup’s demands, it’s not so clear that Syriza can enforce them; there would be massive protests and social order could break down. I suppose their reference to a referendum is indirectly alluding to this. And where would the eurogroup be, holding the signed paper with no one to impose it on the Greek population? In any case there would have to be another election soon enough. Who would pay for policing?

    The EU position takes for granted that Grexit is not a stability risk for the larger Eurozone, but other external factors can change the outlook as well; municipal elections in Spain, May 24th, are likely to serve up enough chaos to scare the financial markets a bit — the main cities are likely to resort to very fragile coalitions, with the new anti-system parties in a major role e.g.
    and Barcelona is even more complicated by the Catalan independence factor.

  39. JTFaraday

    “In other words, Tsipras and Varoufakis sought to ‘save Europe from itself’ by demonstrating that the austerity policies peddled by European banking elites were tearing Europe apart.”

    Why does anyone assume that’s not exactly what the transnational banking elite and proliferating purveyors of technologized security state apparatus want? We have American neoconservatives challenging Russia in Eastern Europe, directly destabilizing the part of Europe that is in closest proximity to the mid-east— although, technically, Greece is closer… Greece is in particular trouble with the help of Goldman Sachs. Thank you Goldman Sachs! The neocons are also exporting blow back terrorism from the mid-east to Western Europe, which provides plenty of support for war there, where it was waning previously.

    It increasingly looks to me that engulfing at least a substantial part of Europe in a violent conflagration is exactly what they want, in the positive sense. ie., that it is a goal. The other option is to assume that they’re merely stupid, or entirely ignorant of history, which I doubt.

    The American working and working middle class is ignorant of history. Anyone else, not so much. “Ooops, I did it again,” to quote Britney Spears (another knowing innocent), is not going to wash.

  40. Thomas Lord

    This is a common line of analysis and it has some flaws.

    First, it assumes that ECB will act as the IMFs enforcer and cut off ELA in order to give IMF political control of Greece. So far as I know nothing actually assigns that duty to ECB and it is arguably their chartered duty to not to take on that role.

    Second, though, regardless of ECB this line of reasoning presumes that only ELA and nothing else can keep Greek banks open enough for critcal businesses and small depositors. Nothing grants ECB that monopoly on power. Any nation with a large reserve of Euros has options to float Greek banks, in combination with capital controls on large depositors to ensure the rescue liquidity does not disappear into the ether.

    In fact, the weaker the Euro becomes under the management of the Eurogroup, the easier it will be for third-party nations to float Greek banks regardless of what ECB does.

  41. Gray Goods

    “Germany is dominant and malevolent, both corrupt and self-pitying. Nationalism and greed are increasingly rampant, with fewer and fewer institutional controls.”
    What? You apparently know next to nothing about nowaday’s Germany, Yves. Especially coming from an American, one of the most “national interest” obsessed nations on earth, this accusation is ridiculous.

    1. Yves Smith Post author

      That’s not my quote. I suggest you read learn to read with greater care. This is from a Congressional insider who has regular exposure to senior political and economic figures in Germany.

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