Skewed — By the end of 2014, Greek voters were sick and tired of the brutal austerity measures their government had accepted in exchange for what were essentially loan rollovers to international banks and the so-called “troika” of major lenders, the IMF, the EU and the ECB (European Central Bank).
Interest kept accumulating. But thanks to slashes in public spending, layoffs and the gutting of public pensions for an aging population, the Greek economy was plunging into a full-fledged depression. Greece was — and still is — in an economic death spiral.
If Greece didn’t borrow more money from the troika, it would go in default, revert to the pre-Euro drachma and face years of chaos as Greek businesses struggled and failed to obtain credit from international banks. And if it did borrow more, it would be forced to pay even higher interest rates, lose public assets to privatization and watch things get worse as unemployment rose and fewer Greeks could buy goods and services.
So Greece borrowed. But borrowing more didn’t help. It made things worse. So Greece decided to opt out.
The Rise of Syriza
In January, Greek voters stunned Western political analysts by electing Alexis Tsipras of the self-proclaimed socialist Syriza party as prime minister.
It was, by all accounts, a cri de coeur, as close to a primal scream as one can deliver via a voting booth: Enough! Enough austerity! Enough with the budget cuts and hopelessness!
Syriza ran on a clear platform: no more kowtowing to Germany and the European Union.
And no more savaging of the social safety net.
Even if it meant leaving the Eurozone and reverting to the Drachma, even if that meant currency devaluation and even more misery in the short run, Greeks said they were willing to endure those sufferings to avoid more of the same: 25 percent unemployment and the sight of graduate students and once elegant women dumpster diving for scraps of food.
Just over a week ago, Tsipras asked Greeks for a No vote on a referendum he called: No on austerity. No to debt slavery, Euro-style. They gave him that vote, decisively.
So now here we are, watching Tsipras engaged in one of the most extreme sellouts of the modern political era. What happened?
Socialist “Radicals”? Not After Angela Merkel Got To Them
Writes Neil Irwin of The New York Times:
“In exchange for a cash lifeline, the country has agreed to much greater concessions than those that were under discussion a few weeks ago. Among them: higher taxes, cuts to government pensions and a sell-off of $55 billion worth of state assets in order to recapitalize banks and make debt payments. That last strategy is a little like a family selling off its furniture to make its mortgage payment; you can do it, but it does not exactly amount to a long term solution.”
Details of the new loan terms still have to be negotiated, but the basics are clear: Things will get worse for Greeks — much worse — than they are now. And that is really, really bad, and comparable to the grisly state of the U.S. at the peak of the Great Depression. All as the result of Tsipras’ sellout.
“One proposal floated in Brussels would require Greece to place $56 billion of state assets in an off-shore trust for liquidation, a huge sum that equals the value of every single thing the government owns,” reports USA Today.
“I thought it couldn’t get worse, but the last week seems like it was designed specifically to humiliate my country. We are not without blame, but it seems as if nobody wants to reach an agreement with us. They want to embarrass us and punish us. When will it end?” asked Maria Scafidi, 29, a Greek tour guide.
Days of Rage
Here is what the seeds of revolution look like.
“By Wednesday, the country must promise to broaden its tax base to increase collections and reform its pension program, including raising the retirement age,” reports The Politico.
What is the point, from the standpoint of Greek voters, of electoral democracy, if elected “representatives” are elected with clear messages, reinforced by clear mandates delivered via referenda, but then are able to ignore those popular directives when they feel squeezed?
If a national desire as clear-cut as that delivered by the Greek public — no more austerity — can be shrugged off just like that, it becomes clear that there is only one route left to effect real change: Violence, revolution and violent revolution.
No one knows what comes next. But I know what’s unlikely: Greeks bending over and taking it.
Google the phrase “Greece revolution” and you get more dates than you know what to choose from. The German-led European push for even worse austerity, the further gutting of pensions and seizing the nation’s public assets, including its municipal parks, would push even a nation of stoner losers to riot.
This being Greece, already past the breaking point, still resentful of the German occupation of Greece during World War II and the fact that the world forgave Germany’s debts afterwards, the safe bet is that nothing is safe.
” I’m relieved that Greece remains in the eurozone, but I still find the terms of the agreement offensive and full of the arrogance the rich and successful often have towards their poorer relations,” Pierre Haski of the French website Rue89 said after the deal was announced.
This is worse than arrogance. It’s hubris.
Not for the first time, the Germans have gone too far.