February 17, 2015
Time always matter. In 1946 Great Britain’s PM Winston Churchill gave a speech at the University of Zurich pointing out the paramount need for the creation of the “United States of Europe”. The statement of Churchill came after an unprecedentedly devastating war that destroyed Europe in political, human, and economic level. Almost 60 years later, the Lisbon Treaty came to solidify the sense of belonging in the EU and train the next generations with a very specific concept: every time that a member-state would need assistance, solidarity would automatically be put forth in economic, social, and political level. Greece is in a state of humanitarian crisis, being hugely affected by austerity measures. Greece and the Greek people should not be punished, but be assisted under a new political plan that overcomes the burdens and fallacies of Eurozone’s economic strategy since 2009.
Many member-states support Greece, but do not show it publicly
Italy, France, Belgium, Cyprus, Ireland are these member-states that support the strategy and proposals of the Greek government. These member-states actually support a rational choice that includes a new economic and investment plan for Eurozone, and a specific plan for Greece. With regards to Eurozone, during the last two Eurogroups it was clear to those following the discussions that, unofficially, a growing support over the proposals of the Greek government is establishing. Officially, the member-states face mounting struggles in dealing with the German policy and the strong insistence in keep going with austerity and the comparatively abnormal demands for budget surpluses of 4-4,5%. Especially France, which is deeply affected by austerity and pressing fiscal consolidation, is more than willing to assisting Greece in the negotiations and putting forward a compromise in the next Eurogroups, put also during the intermediate discussions. Minister of Finance Varoufakis and PM Tsipras have acknowledged these progressive shifts and the subtle alliances created during the previous days and should stick even more eagerly in the current strategy.
How domestic politics affect the compromise
Spain and Portugal were said to be two of the most passionate supporters of the new Greek government. This is not the case so far as the political leadership of both member-states face serious problems in implementing austerity politics. For Spain, the increasing political appeal of Podemos -i.e. standing first in recent pollsters- that fights for a new economic plan for Eurozone and Spain does not leave space to PM Rajoy to follow a different strategy other than resisting to the proposals of the Greek government. In Spain, as it used to be in Greece before elections of January, the most possible scenario is that until November and the general elections, the governing party would insist in austerity but receive growing pressure from the Spanish society to change direction. In this respect, Podemos, especially should Syriza achieve to bring about a fruitful outcome in the economic field, would achieve an impressive win and open a new round of negotiations over the austerity program of Spain.
Portugal has similar burdens, with PM Coelho to face pressures from labor unions and a great part of the electorate that is suffering from continuous economic hardship. Portugal has achieved what Greece achieved in mid-2013: Budget balance, primary surplus, controlled interest rates for borrowing, but a completely fragmented and corrupted economic and labor market. In September-October, Portugal holds parliamentary elections. Should Greece extends pressure on Eurozone over a new economic program, Coelho is expected to be even more squeezed by a movement that comes up vibrantly to confront with austerity: Juntos Podemos.
“Carte Blanche” to Renzi and the “silent work” of Hollande
Italy’s PM Renzi was -before Tsipras’s raise in power – the “bad boy” of Eurozone. Squeezed by the German leadership to abide by the rules of austerity, he was until January 2015 confused on how to build a promising future for Italy’s economy. Now that Tsipras is taking all the blame for putting at question the entire austerity establishment, Renzi feels more comfortable, relieved, and ready to assist Tsipras in his efforts to change course in Eurozone. Meanwhile France PM Hollande, having failed to carry on the promises he was invested with when elected, is now supporting the Greek government in the bras-de-fer with the German government. Diplomatically, during Tsipras’s first participation in EU Summit last week, himself along with Renzi were trying to make the Greek PM feel at ease in a turbulent atmosphere. France is ready to discuss Varoufakis’ proposal on lowering annual primary surplus from 4-4,5% to 1,1,5% thus alleviating public finances and giving space for economic maneuvers by the Greek government. Such maneuvers include a concrete growth plan that would boost employment and productivity in the Greek economy, fight efficiently against corruption and tax evasion, and seek for broadening public income alternative sources towards the re-balancing of domestic economy.
Deadlock + Deadlock = Compromise?
The Greek government wants a compromise. But it wants a compromise that would be balanced, equal and fair for all parts involved and for Eurozone altogether. The huge mistakes of the previous years, the overburdening of the Greek economy with excessive lending, and the absence of any plan to reverse negative prospects for the Greek and European economy, are now in the hands of the Greek government. The momentum is in the side of the Greek government and should exploit it.
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Author : Dimitris Rapidis