The amount of misinformation about the new Greek government being spread by the world’s media beggars belief.
On Friday, Greek financial minister Yanis Varoufakis supposedly refused to cooperate with the “Troika” of
Also on Friday, the Greek government’s refusal to accept further bailout loans was widely interpreted as an intention to default on its debts. This is an unwarranted assumption. Greece does not want to accept more bailout loans, because they are counterproductive for an insolvent country. But it wants to renegotiate its debts, not default on them.
Now we are told that Syriza is backtracking on its “initial defiance”. In an exclusive,
Greece will repay its debts to the European Central Bank and the International Monetary Fund and reach a deal “soon” with the euro-area nations that funded most of the country’s financial rescue, Tsipras said in a statement e-mailed to Bloomberg News on Saturday.
“The deliberation with our European partners has just begun,” Tsipras said. “Despite the fact that there are differences in perspective, I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole.”
The world breathed a collective sigh of relief. Syriza had seen the error of its ways, the Troika had regained the upper hand and all was well with the world.
But this is a completely misleading interpretation of Tsipras’s email. The full text is here (via Yannis Koutsomitis):
The deliberation with our European partners has just begun.
Despite the fact that there are differences in perspective, I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole. No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt.
My obligation to respect the clear mandate of the Greek people with respect to ending the policies of austerity and returning to a growth agenda, in no way entails that we will not fulfill our loan obligations to the ECB or the IMF.
On the contrary, it means that we need time to breathe and create our own medium-term recovery program, which amongst other things will incorporate the targets of primary balanced budgets and radical reforms to address the issues of tax evasion, corruption and clientelistic policies.
I am convinced that an agreement on these lines will be acceptable to our partners, because our common interest is the economic stability and recovery for our common home, Europe.
This doesn’t look much like capitulation to me. In focusing only on his commitment to meet IMF and ECB loan obligations (though interestingly not loan obligations to other EU governments), Bloomberg completely missed Tsipras’ main message. Tsipras actually called for the Eurozone governments and institutions to support his party’s policies.
Bloomberg’s misleading reporting led Eurogroup chairman Jeroen Dijsselbloem, never the sharpest knife in the drawer, to rejoice:
Jeroen Dijsselbloem, chairman of the euro area finance ministers’ group, said he welcomed the prime minister’s comments. Their divisions had been laid bare during a meeting in Athens on Friday.
“It is now up to the Greek government to determine its position on how to move forward,” Dijsselbloem said in a text message. “Further decisions will be taken jointly in the Eurogroup in the coming weeks.”
He couldn’t be more wrong. Syriza’s position can be summarized as follows:
- Greece has no intention of leaving the Euro or the EU. (But others might force it out)
- Greece has no intention of defaulting on its debts to primary official creditors. (But others might force it to)
- Greece is committed to pursuing policies that promote the economic stability and recovery of Europe. (But others might not be)
Far from the ball in being in the Greek government’s court as Dijsselbloem suggests, Tsipras’s request for support sends it firmly back over the net. It is now essential that the other European governments – and EU institutions - demonstrate the same commitment to the future of Europe that Syriza has given in this email. Refusal to consider debt restructuring and demands for Troika “reforms” to continue despite their devastating economic effects do nothing whatsoever to foster European unity. And actions that would result in Greek default and exit actively undermine it.
The future not only of the Euro but of the European Union itself depends on the willingness of European governments and institutions to negotiate a New Deal for Greece and other distressed nations. Over to you, EU.
