Greece's enduring protests

The European single currency project was never about economics and only gently touched on it. It was the price France demanded of Germany in exchange to let German reunification to take place. Europe in 1914 had been very well integrated but still war occurred. Rather than focus on what was present (i.e. a German culture of authoritarian militarism), the mainland statesmen of 1989 focused on what was missing – a Europe wide currency. Tying Germany into that would, they thought, ensure Germany never threatened her neighbours again.
The irony today is that Germany dominates the European Union far more comprehensively than had it retained the Deutschmark (and of course the European Central Bank headquarters are in Frankfurt). The law of unintended consequences is why it has become the bogeyman for many in Greece. Athens was allowed into the Euro club when it was patently unready and even that after the politicians of the day ‘cooked the books’ presented to the EU. Combine that with a mania for austerity throughout Europe in the wake of the 2008-9 financial crash and those on the Euro periphery were always going to suffer.
Before the referendum vote – first proposed back in 2011 by former Greek prime minister George Papandreou but subsequently cancelled under immense pressure – on Sunday 5th July, crowds came out enjoined by fear. Some protested that Greece should accept the conditions set by the troika (EU, ECB and International Monetary Fund) scared of being ejected from the Euro and the instability that would bring. Far more demonstrated against accepting the bailout terms for fear of having to endure (by the EU’s own reckoning) twenty more years of hardship. As Joseph Stiglitz in The Guardian stated, most of the ‘bailout money’ was going straight back into French and German banks, the Greeks getting a pittance and paying a high price for the stability of the northern European banking system. In the wake of the overwhelming ‘no’ vote and rejection of the troika’s terms, Greeks continue to protest so as to continue to add the legitimacy of people power to Syriza’s re-negotiations.
The referendum was not a choice to leave the Euro. Ambrose Evans-Pritchard in The Telegraph claims that Alexis Tsipras and the higher echelons of Syriza did not think their arguments would win the referendum. Whatever the truth of that claim, Syriza now have a firewall should their country be ejected from monetary union and they should survive politically, depriving the troika of its alleged (by Stiglitz) wish to see a hard-left government (in coalition with unsavoury right-wing elements) fail. Had the Syriza administration fallen in the wake of a ‘Yes’ vote, Greece’s creditors may have been more accommodating – an untestable hypothesis.
With unemployment running at 25%, youth unemployment more than double that and those in work having their wages squeezed, it is the biggest peacetime economic collapse since Russia in 1991-93 and it is entirely planned that way. Just as ‘shock therapy’ (alluding to a discredited psychological practice) was prescribed by neoliberal for Russia in the 1990s so Greece is suffering for an ideology – Syriza has said the country is treated as a laboratory.
With so many people without a job, the protests may be said to be disproportionately swollen by those who have lost most in the current settlement to date. But the referendum result – to which Papandreou voted ‘yes’ – confirms an overwhelming silent majority are also fed up of the unrelenting despair that pervades their society now. There are still options available that is at odds with the orthodoxy proposed by the troika – an Argentina-style default (though this is unlikely to be successful given the big differences between Argentina in 2001 and Greece now) or a partial default of debt while remaining in the Euro as Greece’s kin in Cyprus did (though smaller countries are always granted more leeway). Russia, despite its own problems, would be delighted to stump up the cash to disrupt European unity and gain a pawn in the European halls of power and maybe that is the way Tsipras is inclined to go to frighten the dogmatic horses. Whatever the outcome, there will no winners but, depending on debt relief and flexibility, the losers could claim relative progress.