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The Greek referendum dilemma

IMF_opt.jpg

'Cut the Debt. IMF go home' Athens 2015. Denis Bocquet under a Creative Commons Licence

On Sunday I posted a comment on Facebook saying, half-jokingly, that it is about time we (the Greeks) pulled out of the euro and defaulted on our debt, so that German Chancellor Angela Merkel finally bears some of the costs. I didn’t say this lightly, for many reasons: not least because I knew that a lot of my friends and family would find such a statement appalling.

The developments in Greece move faster than my own evolving opinions, as the recently-elected Syriza coalition-government has now announced a referendum for, or against, the demands of the International Monetary Fund (IMF), European Union (EU) and European Central Bank (ECB), long and notoriously known as the ‘Troika’. This vote will be presented by many as a referendum on reverting to the old drachma currency or staying with the euro, which is of course a false dilemma.

The question isn’t ‘euro or drachma?’ but ‘democracy or not?’ If a return to the drachma is the price demanded in order to save democracy, then I know which way I would vote.

As background, I am a European, of Greek descent, born in Germany to people who in the past would have described themselves as ‘reformist-lefties’. As such, I have always been supportive of the European project and the inevitable calls for the modernization (or what the Troika calls today ‘reforms’) of the Greek economy and, ultimately, society.

By now most readers are probably familiar with the general story of Greece having gone bankrupt in all but name in early 2010, the consequent transformation of German and French bank debt exposure into Greek public tax liabilities, and the ongoing saga of Greece being on a liquidity-drip ever since. The drip was of course conditional, as it came from the Troika, which demanded painful reforms such as cutting state welfare programmes, demolishing labour laws and selling off, at knock-down prices, electricity companies, airports, ports, islands, beaches – anything that is worth a penny in Greece.

The Troika demands even included such absurdities as changing the opening hours of pharmacies and designating 5-day-old milk as fresh. That is when Syriza came in. And what they proposed was what Greece ultimately needs to recover: a return to growth on the one hand and the expansion of the tax base and taxable activities on the other. No matter what the ‘European’ faction is claiming today, none of that had ever been on the agenda.

Whether Syriza has any hope of altering the tragic turn of events has always been a thorny question, but what is certain is that elections cannot change the electorate. Regardless of the strong opinions ‘for the euro’, the programmes presented by Greek Finance Minister Yanis Varoufakis were much more credible than any ‘indignant European’ would ever dare to admit. Even conservative writers such as Ambrose Evans-Pritchard of the Telegraph, who wrote that the ‘Greek debt crisis is the Iraq War of finance’, has admitted that. The working papers Syriza presented were consistently dismissed by the neoclassical dogmatists despite the fact that major figures and mainstream economists – from Paul Krugman and James K Galbraith to George Soros, Dominique Strauss-Kahn and the IMF’s own chief economist Olivier Blanchard – agree with them .

I never dreamed that I would suggest that ‘we pull out of the euro’. But I also never dreamed that we would get to a point where currency matters more than democracy, the economy and, above all, society.

The latest demands presented by the Troika were invariably designed to finish off the Greek economy. The demands relating to the pharmaceuticals and the taxation of the shipping industry were more about large European transnationals breaking into these markets than propping up the economy.

No matter what the ‘euro supporters say, there is also a widespread suspicion that the Troika wanted to humiliate Greece and make an example of it. The talk will of course be that Tsipras and his government are cowards who cannot make a decision against the will of the people who voted them in. The wise ‘Europeans’ will point out that Tsipras made promises it would have been impossible to keep: an end to austerity, for example, and no further reductions of pensions or another VAT rise. This belief is firmly based on the current orthodoxy that the neo-classical policies dictated by unelected technocrats somewhere between Brussels and Frankfurt are somehow God-given and the only ones applicable.

The Greek ‘Europeans’ will insist that the capitulation of the democratic institutions to the markets is somehow the most European of all virtues. They will point to the queues at the cash points as proof, as if it was not to be expected all along, following the latest demands by the Three and the consequent Greek response. The Greek Europeans will also, in a very Greek way, insist that Greece is a special case, a bizarre form of exceptionalism based on negatives that sees Greece as an unusually profligate and corrupt state. But this is exceptionalism nonetheless, and it misses the point of how Greece is being made an example for the rest of Europe.

The question I would like to ask the Greek ‘euro supporters’ is whether they believe that a continuation of the same recessionary policies as hitherto will somehow lift the Greek economy. What kind of generation is ours if it is justified to pass on to future generations levels of debt that amount to slavery?

In Greece, people used to murmur that ‘all we need is another junta’. Today this slogan has morphed into ‘in Europe with the euro at all costs’, as if Greece can somehow modernize by the external forces imposed by the ECB, the EC and the IMF. All attempts at an enforced modernization of Greece have failed because they were enforced. If Greece cannot perform within the eurozone, or Greeks cannot take more austerity-induced pain and Berlin cannot consider writing off some of the Greek debt, then something else has to happen.

We all know that the current ‘European’ policies have only made matters worse for Greeks. The people of Syriza know this and are trying a different tack. They were elected to do so and the referendum they have just announced is consistent with the basic principle of democracy: that the people should decide on matters that are going to affect the future course of their lives and the society in which they live. It is for this reason, if not any other, that we should give them our wholehearted support. For democracy.

This is an edited version of a longer article which appeared on the author's blog .

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