In recent days, a large majority of European media and commentators welcomed the victory of the conservative New Democracy over the far-left Syriza in the elections held in Greece on 17th June 2012 as the condition of Greece staying inside the eurozone. In this context, we would like to emphasize three main analyses of the political and economic situation in Greece, in order to suggest a more nuanced view of the results and to point to several commentaries that we found particularly interesting in these comments of the Greek crisis. 

The Greek election: a biased vision in Brussels, a disenchanting victory in Athens  

Commenting on the first elections held in May 2012, Brussels correspondent of the Greek daily news Kathimerini Nikos Chrysoloras points out the often biased vision of European news. The results of both the first election in May and the rerun in June are more complex than what main European observers and leaders have argued. According to Nikos Chrysoloras, parties clearly arguing for an outright default, a return to the drachma and an exit from the EU are only a minority, whose most famous advocate is the Neo-Nazy “Chrissi Avgi” (around 6.9% of the vote both in May and June). Indeed the “Independent Greeks” (10.60% in May, but only 7.51% in June) remain ambiguous on the subject, whereas the Coalition of the Radical Left Syriza (16.78% in May, 26.89% in June) and the Democratic Left (6.11% in May, 6.26% in June) both support Greece’s membership in the eurozone, though they oppose the Memorandum of Understanding between Greece and the Troika (ECB, EU and IMF). 

The vote was therefore not so much about voting for or against Greece’s membership in the eurozone after all, while opinion polls show that an overwhelming 80% of Greeks support it. It was rather about telling the Troika and Western European leaders that the medicine was too strong for an already weakened patient. “We’ve sent Europe a message at last: we can’t take it anymore” reports Nikos Chrysoloras. He also warns against a “got-what-you-deserved” analysis of the impressive score of Syriza, which became the first opposition party, refusing to take part in the new coalition led by conservative New Democracy Prime Minister Antonis Samaras, unlike the Democratic Left and the socialist Pasok. Europeans have to understand that Greeks are enduring the “most savage austerity programme ever implemented in the developed world”, while Greeks have to acknowledge Europeans’ “huge leap of faith by essentially guaranteeing Greece’s debts”, if the eurozone is to stay united. Nikos Chrysoloras sends a clear message to both Europeans and Greeks: “let us understand, before it’s too late, that the road ahead is long, but jumping off the cliff is not really a viable shortcut”.

You can find Nikos Chrysoloras’ analyses, and more insights on the eurozone crisis on the dedicated Heinrich Böll Foundation’s blog.

A systemic change rather than patches to the Memorandum

Prof. Yanis Varoufakis, from the University of Athens, shares the view of a nuanced analysis of Greek political situation. But his recommendation are at the opposite of Nikos Chrysoloras’ ones. Whereas the new government coalition should revise the terms of the memorandum, he warns that such “relaxation will be the worst possible outcome for Greece and a calamitous one for Europe too!” He underlines that the core economic problem of Greece is its economy in itself. Greece’s growth model is entirely dependent on foreign cheap credit, which stopped flowing into the country immediately after the global 2008 financial crisis. “The circuits of credit are so badly damaged that even efficient, profitable firms have been cut out of the capital markets but also out of the international markets”, analyses Yanis Varoufakis. So what is needed is neither more money from richer Eurozone members, nor few months more to repay loans. He proposes instead “a new prescription, as opposed to different doses of the same poison”. Instead of injecting more good money into what he describes as a “Ponzi Austerity”, the European Union should rather recapitalise and restructure the Greek banking system, make the European Central Bank the lender of last resort of eurozone members, and invest directly into the Greek enterprises to boost the economy, rather than using often misused and mismanaged structural funds. 

If he is himself rather sceptical about the probability of such alternative plan, he is even more worried about the “free riding” behaviours of both indebted countries, the “Periphery”, and well-off countries that could help sort this crisis out (i.e. mainly Germany). While the Periphery is buying time in doing what they are told (Greek voters to vote for pro-austerity parties, Irish ones to vote for the Fiscal Compact, etc.) hoping that “the rest of Europe will do the right thing”, Germany has no economic incentives to do so. Indeed “the crisis is pushing Germany’s own borrowing costs to zero, and causing tsunamis of capital to shift from Italy and Spain to its own enfeebled banks”. 

You can find regular updated comments on the Greek crisis on Yanis Varoufakis’ blog.

The Greens engage with Greek citizens on their future in the EU!

The Green European Journal covered amply the discussions of austerity in Europe and has also included analyses from a Green perspective of the Greek elections and debt crisis.  In an article published on the Green European Journal website, Koustas Loukeris, President of the Greek Green Institute for Research & Documentation details the Green position during the campaign. He emphasized the difficulty for the Greek Greens to portray themselves as European, while strongly opposing the memorandum. They warned about the danger of putting on an equal footing “pro-Europeans” and “pro-memorendum”, since it equates Europe to economic neoliberalism. They have advocated for an alternative to austerity, which entails a European sustainable and Green path. But it surely is a difficult message to get across in times of rising populism. Unfortunately the Greek Greens did not manage to pass the 3% threshold to get representatives in the new Parliament.

You can follow the Green European Journal for further analyses of the euro-zone crisis. 

Apart from the Journal, GEF’s future of the EU project also follows the discussions on the crisis, while aiming to confront ideas and proposals for the way the EU should take to sort this crisis out and to rebuild confidence in the European project. Therefore GEF, with the support of Green foundations in Member States, will organise events across Europe to debate the future of the European Union. In order to better understand the Greek political and economic situation, and to convey a European perspective to the Greek political scene that a Green alternative to austerity is possible, GEF will  organise in the second half of 2012 an event together with the Greek Green Institute for Research and Documentation, as part of the future of the EU project. This event will be reported upon in this section of the GEF website. 

Links

• Heinrich Böll Foundation's blog "Euro Crisis"
• Green European Journal's website
• Yanis Varoufakis' website