Daily Times Editorial Feb 24, 2015

Greek drama All eyes have been focused on the newly elected Leftist Greek government of Prime Minister Alexis Tsipras as it wrestles with its creditors and tries to fulfil its campaign pledges of rescuing the country from the bailout package of the European union (EU), IMF, etc, which has imposed as its conditionality a rigid austerity that has led to the shrinking of the economy by 25 percent, increased unemployment exponentially to 25 percent (the bulk of it youth), cut pensions and other welfare benefits, and imposed a draconian straitjacket of maintaining a primary budget surplus of three percent of GDP. The bare figures do not adequately reflect the misery these policy measures have caused across the social spectrum. The exception of course are the rich and powerful business houses that still seem to be thriving as islands of plenty and luxury in a sea of deprivation. The Leftist government has vowed to wage a war against the ‘oligarchs’ who dominate the economy, with the rider that this would not be a wholesale offensive against all businesses but only targeting those who evade taxes or are otherwise found violating or bending the law to their benefit. As these lines are being written, the Greek government was expected to engage with its credit interlocutors to produce a set of its own reforms that were the only concession extracted in return for an extension of the bailout package for four months. The reforms and their acceptance by the EU, particularly Germany, are crucial for Greece obtaining a fresh 7.2 billion Euros aid package after completing the present programme, a target that would ease the pain of the repayment of debt amounting to 3.5 billion Euros due in June. Because of the perceived humiliation of accepting the terms of the government’s creditors, the prime minister is under pressure from his supporters as well as his right wing coalition partners for ‘betraying’ the promise of rejecting the bailout and its conditions on which Tsipras’ Syriza party had won the elections. The compromise reflects the limits of the room for manoeuvre available to the government. Perhaps the compromise was the only possible option to stave off a run on the banks and a widening series of ripples that would have destabilised not only Greece but also the wider EU community. The sense of betrayal therefore is tempered by a sense of immediate relief. While there are many voices within Greece as well as outside it that are advising the government to stand firm on its election platform, the intriguing factor in the situation is how geopolitics and domestic politics are pulling in opposite directions. In this matter, the former is swayed by the Russia factor. Itself under a cloud because of western sanctions imposed in the wake of the Ukraine crisis, Russia is cautiously open to bypassing Ukraine for its gas exports through a pipeline linking it to Turkey and possibly beyond to Greece, thereby giving Moscow much needed alternative access to the southern Mediterranean rim. Of course in the climate that currently defines Russia-western relations, this is being described by NATO as a ‘threat’ to the Baltic countries as well as Greece as a member of NATO. It may be recalled that part of the west’s reaction to Ukraine contemplating a Russian financial rescue rather than the EU package was the ‘horrible’ thought that this would bring Kiev within Moscow’s orbit and make the (unstated) agenda of weaning Ukraine away into the EU and NATO that much more difficult. Imagine then the discomfiture in western capitals at the mere suggestion that Greece could go down that road. The Left’s victory in Greece was hailed as a breach in the wall of right wing or centrist governments throughout Europe. It encouraged immeasurably the Left in other countries such as Spain by its demonstration effect. However, the current negotiations have placed economics at the heart of the conundrum and shown the limits of wresting any country away from the right wing consensus that dominates the EU and the west generally, with Germany leading the charge. If and when other countries in crisis that are suffering from the one-sided austerity misery that Greece has had to endure turn away from this consensus, perhaps the deadening conformity of following Berlin may be replaced by a more creative and flexible attempt to come to terms with the recession that has brought many a once prosperous country in Europe to its knees.