The specter of Greece and the capitulation of the European project

Oxi signs

The Eurogroup emergency meeting came to an abrupt end at 12 a.m. Brussels local time, after 9 hours of excruciating debates.  The vacuum of information caused by the Eurogroup’s closed-doors meeting fostered a twilight zone of sheer terror for some – most of the Greeks –  and patchwork of divergent rumours were abundant: that the Germans would oppose any kind of deal; that, according to a few tweets, the opposition turned into a Finnish ultimatum, and that the Grexit was finally precipitating and imminent.

Within this void, various countries’ positions formed stark opposites. Compare the eternal French “joie de vivre” and the Italian “end to humiliation” with the Finnish, German and Dutch tough-on-Greece stance. All of this underlines that, whatever the outcome of the Eurogroup talks this week, the European project has capitulated and this might merely be the visible tip of a much more profound crisis. The specter of Greece haunts Europe.

A modernization of the Greek economy? The New Greek Proposition

The proposition that the new Greek finance minister Euclid Tsakalotos tabled Thursday wasn’t in itself that different from the propositions that were deemed inacceptable by his ex-colleague Varoufakis not more than a week ago and which were also massively refused by the Greek public.

The new Greek proposal consists in its main outlines of cuts to pensions, which have already dilapidated since the onset of austerity measures in Greece, a rise in the sales tax (VAT), the progressive phasing-out of the VAT exemption for Greek islands, and the privatization of the last of the Greek public assets i.e. the port of Piraeus, which has been a point of contention.  Within the this potpourri of austerity on steroids the only silver-lining – if any –was to be found in the propositions of rising the corporate tax rate and the abolition of the exemption of taxation for ship-owners; a relic of the fascist dictatorship of colonels. These latter proposals were already turned down in previous negotiations by the Eurogroup.

Euclid Tsakolotos
Euclid Tsakolotos. Photo from Sinn Feid, Flickr CC by 2.0.

The emphasis was put on the “modernization” of Greece, by putting in place  necessary measures and adjustments to move Greece forward. This being said, drastic efforts have been put in place over the past few years to ensure that end; however the European Union has been unwilling to help with the said “modernization,” especially in terms of its financial framework, its taxation system and coming to its aid in its fight to prosecute tax evasion. The amount of Greek euros held in financial safe-havens like the London, Luxembourg and Switzerland in general, is incalculable.

Tsipras and the coup of the extreme-center

It might seem extraordinary, schizophrenic even, that, in less than a week, the Greek position, which seemed to be at the pinnacle of its power, invigorated by a crushing “Oxi” vote and the resignation of one of the main political leaders of the political opposition Antonis Samaras, capitulated to the rapacious force of the creditors. But to think anything different was failing to see the prophetic signs that those who had pillaged Greece for the past five year – some might say for decades – had any will to relinquish their hold of the Greek economy.

Thursday, as the first outlines of the new Greek proposition were tabled and the new package was put for before the Greek parliament to be voted upon, even the Greek prime minister couldn’t hide the calamity that was before Greek legislators.

Between a bad and a catastrophic choice, we are forced to choose the first […] it’s not easy but we have to,” Tsipras said. During a tense and fratricidal debate, 251 MPs, many from the ranks of the governing coalition and those of the neoliberal extreme-centre (Potami and New Democracy) voted in favour of the new proposition. Notably, Tsipras lost the foundations of his governing majority and a split within SYRIZA (of its left platform) is imminent. The anti-austerity majority rising from the still fuming victorious Oxi vote was thus transformed, within the space of a few days, into its most dreaded enemy: a reconstituted, reinvigorated, extreme centre.

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The Eurogroup meets

From financial waterboarding to financial strangling

But this “strategic retreat,” as some have dubbed it within the European left, was the obvious outcome of the negotiations from the moment ex-finance minister Varoufakis resigned amidst the elation of the crushing victory of the Oxi camp as the final votes were being counted in last weeks referendum. The stance that Tsipras took, that a strong Oxi vote was a tactical maneuver to strengthen the Greek negotiating position didn’t materialize. Instead, the hounds of austerity saw the referendum as a provocation.

The first move of the Eurogroup through the European Emergency Liquidity Assistance (ELA) was to maintain their stranglehold on the Greek public, through withholding funds that should have enabled Greek banks to reopen within this past week. This position was no different from the ELA’s position to cut all funding to Greek financial institutions from the day the referendum was called.

Using such tactics, which have come under none or very little criticism through the European partners, as ex-finance minister Varoufakis announced the morning of the referendum, was a move with the objective of terrorizing and subduing the Greek people into voting in favour of the dictum of the Eurogroup.

With all the frenzy of a Grexit, few have noticed that Greece has been de facto under a financial embargo, which has pushed it to the fringes of the Eurozone and was a consequence of European policy and not the hidden agenda of the Greek government.

Tsipras speaks
Tsipras speaking

A symbolic death for Europe

Two dynamics have been lethal for the Greek cause within the negotiations.

First: The Eurogroup reigns supreme. Europe, having pushed its weight around, has proven that it is the only relevant instance, that its members are the real deal brokers behind the curtains, and that’s where power lies within Europe outside of the public sphere: in a place at the antipodes of democracy.

Second: the Greek referendum had a huge symbolic importance but unfortunately not much more than that. The Oxi of 61% of Greeks within the current framework of the European Union is only binding to those that care for the notions of democracy and popular sovereignty. Those notions are alien to the Schäubles and Dijsselbloems of this world.

Many have stated the cataclysmic consequences of a Grexit for Greece, but little have measured the consequences this entire process has had on the future of the European project. While making his way through the hoards of journalists awaiting some newsworthy shred of information, Dijsselbloems stated that it was “still very difficult because of the lack of confidence that reigns between lenders and the Greek government.”

The European institutions have proven right – some would say once again – the Eurosceptics in their view that the EU has a complete disregard for the democratic will of the peoples it supposedly represents. The distrust between the peoples of Europe and the European institution has taken various forms. “Fascistoid” and xenophobic political formations have capitalized on this lack of confidence. The EU that sought to “modernize” Greece is in need of a profound “modernization” itself, which is why, today, the downfall of Greece might not necessarily mean the downfall of the EU. However, for the sake of a brighter future, it must mean its demise.

As Zoe Kostantopoulou said addressing the Greek parliament, “The No of the Greek people stands above us all.” “No”s in more languages than one will come in future and that’s the specter that haunts Europe.

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