As Germany Stands Firm Against Attempts to Scale Back Austerity in Greece, What’s Next for Syriza?

Germany’s unwillingness to budge on the strict cuts demanded of Greece are bad news for rolling back austerity throughout the rest of Europe.

Alexandros Orphanides

(Theophilos Papadopoulos / Flickr)

The European Union faces a difficult choice — one that will impact the future of the Greek government and people and Europe as a whole. On Friday morning, the choices for Greece’s Syriza government appeared to be either staying in the Eurozone and capitulating to German demands for strict debt repayments and austerity, something Greek Finance Minister Yanis Varoufakis has likened to fiscal waterboarding,” or leaving the currency union and venturing into uncharted territory. There were no other options.

Germany doesn’t want to negotiate with a leftist government in a stable Greece. Any indication of success on the part of a leftist government elected with grassroots support would only serve to embolden popular uprisings throughout Europe.

As of Friday afternoon, there are reports of an initial draft. News out of Brussels indicates that the draft includes a four-month extension of the bailout without austerity measures,” while still blocking Greece’s sovereignty over minimum wage increases and home foreclosures. These developments may be tantamount to maintaining austerity without referring to it by name. 

Since winning the country’s election on January 25, Syriza has been on shaky footing. First, they inherited a country running out of money, a bailout agreement on the brink of expiring and a humanitarian crisis. They won largely by campaigning against all of the above. Second, they needed to form a coalition in order to hold a majority in parliament. Syriza was rejected by Greece’s communist party, the KKE, a party hellbent on maintaining its rigid Marxist-Leninist dogma and revolutionary credibility. Syriza formed a shaky and controversial coalition with ANEL, the right-wing Independent Greeks. Entering negotiations, the goal for Greece was clear: Running out of money, facing an uncertain economic future and seeking terra firma, they aimed to secure stability.

To do so, the Greek government aimed for a bridge agreement that would hold it over for a few months. After rounds of talks and sustained resistance from their German counterparts, Syriza succumbed and submitted a six-month loan request on Thursday; more clearly put, they asked to extend the bailout.

In what many European commentators are regarding as temporary capitulation, Syriza went so far as to propose that the Troika (the International Monetary Fund, the European Commission and the European Central Bank) remain in Greece to monitor the bailout. This, coming from a party that campaigned as anti-bailout, anti-austerity and anti-Troika, was a tremendous concession. Germany quickly rejected the proposal. Syriza is now feeling the constraining power of capital.

The European Commision had a favorable response to the proposal, welcoming it as a harbinger of stability to come. But Germany undermined the Greek efforts and claimed that the proposal was insufficient, amounting to nothing more than a bridge agreement and did not fulfill the demands of the program.” A day earlier, German Finance Minister Schäuble said it can’t and won’t be the case that you go for an extension without the agreed reforms.” In other words, no continued bailout without continued austerity.

In seeking a six-month extension, Varoufakis, the Greek finance minister, was aiming for stability so that we can negotiate a new agreement between Greece and Europe.” But Germany doesn’t want to negotiate with a leftist government in a stable Greece. Any indication of success on the part of a leftist government elected with grassroots support would only serve to embolden popular uprisings throughout Europe. Spain’s Podemos party is currently polling in the lead for the elections at the end of the year, and their leader, Pablo Iglesias, is openly critical of Merkel. Germany’s message to Syriza seems to be, You can win elections but you cannot wield power.”

Since the crisis began, Europe has implemented various contingencies to stabilize the currency union should a country leave. On Thursday, Standard & Poor claimed that a Greek exit would have minimal negative effects due to the stabilizing mechanisms in place to help countries facing market pressure. But Syriza can test this by unleashing the threat of a departure and displaying the effect a mere mention of an exit would have on markets and the euro.

Varoufakis has contended that a Greek exit from the currency union would lead to further fragmentation that would jeopardize European capitalism. The recessionary consequences would cripple progressive governments, destroy the European project and only serve to benefit fascist and xenophobic parties like Golden Dawn that are already on the rise in Europe. Hearkening back to the Great Depression and the conditions that gave rise to Nazism and fascism, Varoufakis wrote in 2013, I, for one, am not prepared to blow fresh wind into the sails of this postmodern version of the 1930s.”

The bailouts came with the mandatory curtailment of social programs. Indeed, public sector salaries were slashed, pensions decreased and public health deteriorated. These policies sunk Greek society into a state of social despair. If these conditions made a turn to the left possible, their continuation and worsening can make a turn to the hard right just as possible.

While this scenario might seem a bit fantastical, it isn’t. Varoufakis is referring to the rise of anti-immigrant, anti-semitic and Islamophobic sentiment throughout Europe. In France, far-right politician Marine Le Pen is a viable candidate for President. Le Pen has likened Muslim public prayer to the Nazi occupation of France. Just two months ago, in Dresden, Germany, 15,000 attended an anti-Islamization rally. In Greece, Golden Dawn, an openly racist neo-Nazi party, has advocated for increased territorial disputes over Istanbul with Turkey and mass deportations of undocumented immigrants.

By providing breathing room for an exasperated populace, Syriza is trying to stave off the extremism born of desperation. Europe could help Greece and vindicate Syriza by supporting its other major project, doing away with oligarchic corruption to produce a better-run Greece.

Forcing the Greek people to capitulate again will crush Syriza’s credibility and may spell strangulation for progressive politics in Greece and Europe. When the suicide rate climbs or the plight of the already-desperate urban poor worsens, these talks will be remembered. Some will blame Syriza and others will blame Germany. But who will be blamed when the first neo-fascist party ascends to power on the continent? Europe faces an urgent decision — because it isn’t just Greece that’s in crisis.

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Alexandros Orphanides is a New York City-based freelance journalist, researcher and teacher of Greek-Cypriot and Honduran descent. He writes on political, social and cultural issues with an emphasis on marginalized communities. Follow him on Twitter: @subsentences.
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