Δημοσιεύτηκε στο περιοδικό «Current History» (Μάρτιος 2016)
1.
On April 10, 2015, the remote village of Echinos, NW Greece, witnessed a strange spectacle, at once surreal and alarming. This being Good Friday, the Epitaph (an icon of Jesus wrapped in linen and decorated with flowers) was taken out in procession through the muddy streets of the village, on a cart carried by eager parishioners. As in countless other villages and towns throughout Greece (a largely Christian-orthodox country), the procession was led by priests and followed by a small crowd holding lit candles. Usually, the crowd is on such occasions relaxed and rather mixed: few are habitual church goers; most are keeping tradition, or simply enjoying the walk.
But the procession in Echinos was tense, and the crowd unusual. The men were activists with the ardently nationalist Decommissioned Officers Union, bussed in with their families earlier that morning from the nearby town of Xanthi. The icon was carried by four army conscripts in uniform. An army vehicle was parked just outside the village. The only local people in the procession were from the village health centre and the police outpost. The rest of the village stared in disbelief and, conceivably, impotent rage at what was an officially-sanctioned act of intimidation. Because Echinos is not like most Greek villages: it is entirely populated by Muslim Pomaks, a Slavic-speaking community protected by the 1923 Treaty of Lausanne. The last time an Epitaph procession was carried out in the village was Easter 1965. Even the military junta that ruled the country between 1967 and 1974 had seen little point in fanning ethnic tensions in the area. So what exactly is going on? Was Greece not supposed to be ruled by the radical Left?
The short answer is Panos Kammenos, leader of the rabidly nationalistic Independent Greeks, Minister of Defence, apparently authorised by PM Alexis Tsipras to run the Army as he sees fit – which in his case means according to the traditional ‘values’ of the reactionary Right to which he has always belonged: Fatherland, Religion, Family. His credentials are impeccable. A specialist in virulent polemics (on one occasion urging protesters to lynch a local mayor with whom he had an argument), he often graces parliamentary debates with his trademark vulgarity, usually spiced up by heavy sexual innuendo. His pitch is that Greece is under attack, led by a worldwide conspiracy comprising Jews, Free Masons, the US government, German Chancellor Angela Merkel, the European Commission and others. The bailouts and austerity programmes since 2010 are really a scheme to subdue the proud Greek nation. Agricultural aircraft spraying crops with pesticides are in it too: in reality they are spraying the population with sedatives, in a bid to suppress its natural rebellious inclinations. Thus spoke Kammenos, in a 2011 parliamentary motion.
The longer answer as to what someone like him is doing in a leftist government is part of an arcane and disconcerting story, rarely told by foreign reporters. Its origins are lost in the mist of time. Nationalism, sustained by the ingrained belief that Greeks are the ‘chosen people’, direct heirs of the glory that was ancient Greece, for which the rest of the world owes them royalties, broadly shared across the political spectrum, takes large part of that story.
But the story really comes to life in 2011. George Papandreou’s government falters. Under the terms of the infamous May 2010 ‘Memorandum’, as the bailout agreement is known in Greece, his government has had to legislate scores of unpopular policies: wage and pension freezes then cuts, steep tax hikes, and ‘structural reforms’, promising to make the economy more competitive (and, in the process, disrupting cosy arrangements to which all concerned had grown accustomed).
Earlier that year, during the hot summer of 2011, Syntagma (‘Constitution’) Square of Athens had been occupied by demonstrators protesting at austerity, neatly divided along ideological lines. Those in the lower part waved red flags, railed against foreign speculators, demanded ‘national liberation’, sang The Internationale, and debated the economics of debt default with the movement’s rising stars (some soon destined to become government ministers). Those in the upper part waved Greek flags, railed against foreign speculators, demanded ‘national liberation’, and sang the national anthem. The two sides coexisted peacefully, joining forces to shout abuse at Parliament across the street (‘Burn the whorehouse!’), holding up cardboard scaffolds (‘Hang the traitors!’), some even mobbing the occasional government minister.
In November 2011, in a desperate attempt to regain the initiative, Papandreou informs his European partners that he intends to call a referendum on Greece’s bailout. It is ill-fated. On the one hand, eighteen months after the event, it seems late for a popular consultation. On the other hand, European leaders are in no mood to jeopardise economic recovery, nor to upset the delicate balance struck in the 2010 deal. In place of unreliable elected politicians, their favourite option is a safe pair of hands, preferably a central banker. In the same month that Mario Monti replaces Silvio Berlusconi, Lucas Papademos succeeds George Papandreou.
When the conservatives of New Democracy unceremoniously ditch their earlier anti-bailout stance to enter the new coalition government, , Kammenos (until then a party loyalist) seizes his chance: he casts a vote of no confidence, following which New Democracy expels him, so he founds Independent Greeks. Alexis Tsipras, leader of the Coalition of Radical Left (SYRIZA), welcomes him to the anti-bailout camp. Their alliance rests on a lot more than mere electoral calculation: the two men profess a common Weltanschauung: a collective vision of what went wrong with Greece, and who is to blame.
2.
That vision is easy to summarize: Greece is a great country. Nothing much is fundamentally wrong with its economy, say, that cannot be fixed by removing the ‘traitors’ from power. The budget deficit may have reached 15.4% of GDP (in 2009), against a common pledge of all EU member states to keep it below 3%, but that was due to ‘corrupt politicians stealing our money.’ The public debt may have skyrocketed, but it was mostly ‘odious’. In any case, as the anti-bailout Left argued, they had never been in power, so how could they possibly bear any responsibility for Greece’s bankruptcy? That was ‘not their debt’. Never mind that, to take just one example, government subsidies to prop up the country’s inefficient and grossly unfair pension system piled up in only 12 years to two thirds of the entire public debt. The radical Left and the unions had fought pension reform tooth and nail, yet they furiously protested at the suggestion that they ought to share as a result some of the blame for the current mess.
The anti-bailout camp’s response to the shock and humiliation of the crisis and subsequent austerity in 2010-2014 was simple and effective. Its leaders offered instant absolution: since it was not the people’s fault, nobody had to suffer – except, that is, for those found guilty of squandering the nation’s wealth. The tone of political debate, never particularly sober in the best of times, became outright vitriolic. Opponents were traitors, lackeys to foreign powers, ‘Merkelists’, no better than collaborators with the Nazis in 1941-1944. Tsipras, Kammenos, and lesser figures in their respective parties, seemed to be in a grotesque contest of who will shout loudest. As Newspeak spread, hyperbole abounded: rising poverty and unemployment was dubbed ‘humanitarian crisis’; a modest plan to shuffle public employees from overstaffed agencies to understaffed ones was ‘social genocide’; a week-long riot in protest at a project to create a landfill and recycling plant was hailed as ‘symbol of dignity and resistance’; most alarmingly, anti-bailout leaders refused to condemn physical violence against politicians: ‘that was an undemocratic regime, so people had a duty to protest’. The language of ‘war’ replaced that of normal political conflict. As SYRIZA’s election campaign put it: ‘It’s either us or them’.
As for the anti-bailout camp’s plan to deal with the crisis, it was simple and perfectly painless. Tsipras would abolish austerity at one stroke, on Day 1 from being sworn into office. ‘What if Merkel objected to your unilateral cancellation of the bailout agreement?’ asked the host of a popular TV show in the run up to the January 25, 2015 general election. ‘The chance of that happening is less than one in a million’ assured him (and viewers) Alexis Tsipras.
All this (and more) would eventually come back to haunt Tsipras and his allies. But for the time being, it worked wonders. SYRIZA emerged from the election as the largest party, with 36% of votes cast (up from below 5% only five years before), and invited Independent Greeks to join the government. The victorious anti-bailout coalition was now firmly in charge.
Given that the proximate cause of the early election was the previous parliament’s inability to muster the qualified majority constitutionally required to elect one, a suitable candidate for the office of President of the Republic had to be swiftly identified. Eventually the job was handed to Prokopis Pavlopoulos, former minister in the 2004-2009 conservative government led by Kostas Karamanlis. (A bit incongruously, the anti-bailout narrative of past governments carrying all guilt let off the hook that one, on whose watch the budget deficit grew from 3.6% to 15.4% of GDP.) In the eyes of SYRIZA supporters, this somewhat paradoxical choice for a leftist government was justified by Pavlopoulos’s record as Minister of the Interior, and in particular the way he had handled the December 2008 riot following the death of a 16-year old kid from a police bullet. While Athens burned, shops were looted, public buildings and monuments were vandalised, the then Minister simply called the police off the streets, waiting for the riot (which SYRIZA had likened to the 1821 War of Liberation) to run out of steam. His other major achievement, hiring (literally) hundreds of thousands of public sector workers on fixed-term contracts just before the 2009 general election, must also have played in his favour.
3.
As the new government settled in, it turned to the actual business of governing. Item 1 on the agenda was the renegotiation of a new ‘lending agreement’ with Greece’s European partners. That task fell naturally to Yanis Varoufakis, the flamboyant economist who had popularized the notion that ‘Greece was as responsible for its current troubles as the state of Ohio had been for the 1929 Great Depression’, and had convinced Tsipras that ‘the markets will dance to the Greek government’s tune’. The new Finance Minister relished the challenge – and took to lecturing fellow finance ministers on economic policy, just as his PM lectured fellow heads of government on democracy, both insisting on European leaders’ duty to respect the verdict of ‘the people’ (i.e. drastically curtail Greece’s debt, and provide the country with more cash, no strings attached).
Unsurprisingly, negotiations were conducted in an atmosphere of mutual incomprehension. European leaders insisted that no country could receive financial assistance except under an ‘Economic Adjustment Programme’, and demanded figures, performance reports, alternative suggestions. All the Greek side could offer was procrastination: pious pronouncements on the plight of the Greek people, hastily improvised ‘reform plans’, and a general refusal to engage. In a typical gesture of defiance, the government insisted that European officials could not be admitted in ministry buildings – that was how the previous government did business. Review meetings had to take place in hotel rooms instead.
Soon patience ran thin. Eastern European leaders, like the Slovak PM, pointed out that their countries were actually poorer than Greece, and complained they were unable to explain to their electorates why their salaries and pensions had to be cut so that those of Greeks could be raised. For German Finance Minister Wolfgang Schäuble, the Greek impasse strengthened the case for an ordoliberal Europe, in which no place is reserved for those unwilling or unable to commit to strict fiscal rules. But even those initially sympathetic to Greece, or determined to keep Europe united, like European Commission President Jean-Claude Juncker or French Finance Minister Michel Sapin, eventually grew exasperated by Varoufakis and his antics. Greece was isolated.
Varoufakis himself remained unflappable. His ‘brinkmanship’ rested on the assumption that Grexit (as Greece’s exit from the Eurozone became colloquially known) would be costlier for the country’s European partners than for Greece itself. But that was a serious miscalculation. (A Greek default in 2010, when French and German commercial banks still held the bulk of Greek public debt, would have inflicted serious damage to the European economy. Even so, it hardly followed that the Greek government then could have credibly threatened to default in order to obtain more generous bailout terms: that would have relegated Greece to the status of a pariah state, cut off from the markets, its people facing untold hardship. Argentina during the 2001 corralito was at least self-sufficient in food. Greece in 2010 had to import tomatoes.) In any case, by 2015 policy makers and market analysts agreed that the European economy was strong enough to withstand the fallout from Grexit, even though most still argued that such unpleasant events were best avoided.
4.
Meanwhile, time was running out: the June 30 deadline, when the bailout agreement was due to expire, loomed large. Mario Draghi, President of the European Central Bank, whose policy initiatives (his 2012 pledge to do ‘whatever it takes’ to save the euro, and his 2015 quantitative easing) had put him at odds with Schäuble and had incensed the Bundesbank, made it clear that his hands were tied. In the absence of a new bailout deal, he was bound by Bank rules to lift the waiver allowing banks to use Greek bonds as collateral to gain access to the ECB’s normal refinancing operations. In a gesture of goodwill, he continued to provide short-term (and more expensive) Emergency Liquidity Assistance.
On June 18, Tsipras flew to St. Petersburg. In his speech, delivered in the presence of Vladimir Putin, the Greek PM brushed aside critics who wondered why he was not in Brussels trying to secure an urgent deal with the country’s European partners, and openly courted his host. “We are at the centre of a storm, but we Greeks are a nation of seafarers: storms do not scare us. We are ready to go to new seas to reach new safe ports.” Was he seriously suggesting Greece might leave the Eurozone? Or was he bluffing, to get better terms in Brussels? We may never know. It could be that he was not sure either. In any case, cash-starved Russia was hardly in a position to lend Greece the sums it needed to keep afloat. But even if it were, it was unlikely that bailing out Greece suited Russia’s interests: in geopolitical terms, Greece was worth more to Russia inside the EU (e.g. blocking sanctions) than as an outcast.
On June 26, after yet another inconclusive meeting in Brussels, Tsipras called an emergency meeting of his cabinet, at which he announced that he could not accept the deal proposed by the country’s creditors: he had decided to put it to popular vote. The referendum would take place on Sunday July 5.
On June 28, Tsipras went live on TV to announce that his government had decided to introduce capital controls and to close the banks until after the referendum. Savers could withdraw up to €60 per day. Firms were badly hit, exports declined, output plummeted. The timid recovery of 2014 were to prove short-lived: Greece was again in recession.
To the consternation of democracy activists at home and abroad, the referendum fell short of both the Greek constitution and international standards. Council of Europe Secretary General Thorbjørn Jagland protested that the vote had been called on too short a notice, and that the questions put to voters were unclear. In fact, the ballot paper read as follows: “Should the deal draft that was put forward by the European Commission, the European Central Bank and the International Monetary Fund in the Eurogroup of June 25, 2015, and consists of two parts, that together form a unified proposal, be accepted? The first document is titled ‘Reforms for the Completion of the Current Programme and Beyond’ and the second ‘Preliminary Debt Sustainability Analysis’.” All in all, 74 words (in Greek).
For a few heady summer days, Greece’s future seemed to hang on the balance. Was Tsipras poised for Grexit, ready to turn the country into a third-world autocracy, a satellite of Putin’s Russia? Many Greek progressives clearly feared so, and mobilized for a ‘Yes’ vote. Theirs was a genuine grassroots movement, spontaneous and leaderless, reclaiming the streets that had for long been monopolised by the Indignados now urging the government to ‘teach Europe a lesson’.
Tsipras went on the offensive. The frequency and length of his television addresses, against constitutional guarantees of par condicio, started to resemble Hugo Chavez’s Aló Presidente. In terms of content, they were at once inflammatory (supporters of a ‘Yes’ vote ‘were wittingly or unwittingly doing the bidding of foreign lenders’) and reassuring (a ‘No’ vote would ‘not jeopardize Greece’s place in Europe’).
Observers from afar joined in. Celebrated economists and Nobel laureates Joseph Stiglitz and Paul Krugman urged Greeks to vote ‘No’ – on the grounds that uncertainty and dwindling living standards were still preferable to accepting the Europeans’ demand ‘that the policy regime of the past five years be continued indefinitely’ (Krugman), or to the ‘unconscionable torture of the present’ (Stiglitz).
In Europe, the main supporters of a ‘No’ vote were mostly of a different political persuasion. The xenophobic Right, led by Marine Le Pen of France’s Front National, Nigel Farage of UK Independence Party, and Matteo Salvini of Italy’s Lega Nord, all came out in force, cheering the Greeks all the way to Grexit. On their part, mainstream European leaders called for Greeks to vote ‘Yes’ and stay in Europe. Significantly, Germany’s Wolfgang Schäuble failed to join the chorus, his words widely interpreted as providing indirect support for a ‘No’ vote: ‘We will not leave the Greek people in the lurch’, he told the Bild newspaper on the eve of the referendum (Saturday July 4).
As it turned out, the referendum was a resounding victory for the ‘No’ vote: 61.3% to 38.7%. A remarkable result, no doubt. Or was it? In effect, voters had been asked if they accepted austerity as the price for staying in the Eurozone, or if they’d rather reject austerity but keep the Euro all the same. Seen from that angle, what is remarkable is that so many people voted ‘Yes’.
Crowds filled the streets, celebrating what they thought was another episode in a long history of rebeliousness in the face of foreign oppression. But in the corridors of power, an altogether different mood prevailed. After six months of brinkmanship, Tsipras now stared into the abyss. Schäuble’s offer of aid, to alleviate the (real) humanitarian crisis about to break out if Greece were to make the transition to a national currency, was the final proof that Varoufakis’ gamble had been ill-judged (to say the least) from the very beginning.
5.
With his cunning plan lying in tatters, Tsipras had a few hours to decide whether he wanted to be remembered as the man who took Greece out of Europe. As even he had come to realize, Grexit would be an unmitigated disaster. Reflating the economy via an expansionary fiscal and incomes policy stance may be a good way to kickstart a moribund economy. But (pace Stiglitz, Krugman et al), as a recipe for Greece managing its own currency again, it would set in motion the spiral of economic decline which Greeks thought they had left behind for good on joining the Euro: devaluation, inflation, erosion of real wages, lower living standards for all. And this would be the good scenario; the bad one being the end for the foreseeable future of Greece’s ambition to be a European country, with all the terrifying implications this was likely to have for Greek democracy amidst economic decline and geopolitical anxiety.
Which is probably why opinion surveys (including the European Union’s own Eurobarometer) showed that support for the Euro remained high in the country. After five long miserable years of EU-imposed austerity, at the height of the mid-summer confrontation, when anti-European propaganda reached a paroxysm, as many as 70% of Greeks consistently said they wanted to keep the Euro. That seemed as good a hint as any that ordinary Greeks intuitively understood better than many outsiders that outside Europe the country had little future.
Now there was only one alternative for Tsipras: to make an undignified U-turn and capitulate. And this he duly did. The morning after the referendum (July 6), looking mysteriously glum for someone who had just won a landslide victory at the polls, Alexis Tsipras met the President of the Republic and opposition leaders, following which they all announced that Greece was now ready for a new bailout agreement. On July 13, Tsipras signed the third ‘Economic Adjustment Programme’, committing Greece to three more years of austerity and structural reforms.
While most Greeks, including many who had just voted ‘No’, breathed a sigh of relief, ΣΥΡΙΖΑ activists reacted with shock and disbelief. Some joined the 25 MPs who left to found ‘Popular Unity’, a new party openly calling for Greece to leave the EU. Many more simply went home, disenchanted by politics altogether.
In a shrewd move to preempt the opposition (now including former SYRIZA stalwarts), Tsipras called for an early general election, scheduled for September 20. European leaders nodded their agreement: they wanted the government to have a fresh mandate. Weary Greeks shook their heads: their politicians, having proved singularly incapable of even tackling the country’s woes, reverted to the one thing they knew well: electioneering.
Tsipras ran a lacklustre campaign, mostly focusing on his own charisma, which seemed wise: after the ignominious end of ‘We will end austerity on Day 1’, the party had run out of political programmes. SYRIZA and Independent Greeks, their combined share of the vote at 39% (from 41% at the January election), were again able to form a government. Tsipras and Kammenos beamed, giving one another the high five on camera. Voter turnout reached an all-time low (55.2% vs. 62.4% in January). In the formerly anti-bailout camp, intoxication gave ground to disillusionment.
6.
As annus horribilis 2015 drew to a close, it was easy to imagine everybody taking stock. Tsipras and his faithful had failed to change Europe, but could at least enjoy the smaller pleasures of office, including the time-honoured practice of handing state jobs to cronies. Ordinary Greeks woke up to higher unemployment and lower incomes than what was on course in 2014. At EU level, the Greek stand-off had served to reaffirm the ordoliberal order: siding with conceited Varoufakis was never an option for European politicians, in spite of their misgivings about the austerity gospel according to Schäuble. The next challenge came from a committed European, Italy’s Matteo Renzi, who bargained hard for a more relaxed fiscal stance to help European reformists like himself implement their programme and see off their eurosceptic opponents.
Meanwhile, as the spotlights on the Greek crisis were turned off, another drama unfolded: over a million migrants and refugees crossed into Europe, as many as 85% of them landing on Greece’s shores, some (including many children) losing their lives in the attempt. Their arrival deepened the anxieties of many Europeans, nerves frayed by the murderous attacks in Paris, and looked set to test the limits of European solidarity. As one EU government after the other rushed to seal the national borders, leaving Greece and Italy to cope with the bad luck of their geographical position, and in spite of calls for a more orderly response by Germany’s Angela Merkel, the omens seemed anything but good.
