In a single sentence, the title says
in a nutshell what the Greek tragedy played out during the weekend attempted to
convey in a diplomatic way. The Greeks don’t want to repay their debt. Period.
Not only that, they are not even willing to save some money by cutting down on
some of their socialist profligacy. Greeks want Europe to supply them with
money to squander to their hearts’ content.
Austerity is a word anathema to Greek
society. I see in Google that the word translates to litotita in Greek. Is it such a bad word in that language? I
certainly don’t know. But looking back to the fate of governments that tried to
implement a few of the austerity measures, I am tempted to think it is! Antonis
Samaras, the 64-year old leader of the centrist New Democracy party, who was
the prime minister from 2009, was successful in achieving a budget surplus in
2013 and also a triumphant return to global bond market with a decent yield
of around 4.95%. Greece returned to growth after six years of economic decline in
the second quarter of 2014, and was the Eurozone's fastest-growing economy in
the third quarter. But he chose the path of economic reforms, austerity
measures and privatization as suggested by the consortium of creditors, who
were naturally averse to the debtor again going along the wasteful path.
Samaras was defeated in the election held in early 2015, paving the way for the
leftist Syriza party to assume office under Alexis Tsipras, who was also Greece’s
youngest prime minister at 40.
Syriza forgot the cardinal axiom in
democracy that it is always easier to sit in the opposition, criticizing the
government left and right on every issue. Being a leftist party, their policies
were naturally outdated and flawed. Unable to calibrate their ideas to the new millennium,
Tsipras couldn’t stem the slow slide to disaster, when the country at last had to
concede sovereign default on its payment by the end of June 2015.
Now comes the clever part in the drama. Tsipras and his team knew that their game was up. To continue
to provide liquidity in Greece’s economy, he would’ve to concede exactly those
measures which drove his predecessor to doom. Unwilling to take that risk, he
deftly called for a national referendum to seek popular opinion on the issue.
If the people voted ‘Yes’, it meant they didn’t mind imposing austerity
measures, and if they voted ‘No’, that implied leaving the Eurozone and big
uncertainties in the economy. During the week leading to the referendum, all
banks were closed and a paltry limit was set on the amount that could be
withdrawn from ATMs. Newspapers flashed images of the elderly weeping in front
of teller machines apparently at their inability to withdraw pension funds.
Though Tsipras asked the people to vote ‘No’, it looked as though people’s
hands were forced by the strict controls on banks to vote ‘Yes’. Syriza
declared that if the vote was ‘Yes’, they would relinquish power. A ‘Yes’ vote
was hoped to be the escape route for the beleaguered leftists.
But alas, the Greeks were determined not
to let them off the hook so soon. With a stunning 61% ‘No’ vote, they
overwhelmingly supported Tsipras in his anti-austerity and anti-creditor moves.
Syriza and Tsipras must continue to govern, howsoever unpleasant it might turn
out to be. They lost a loophole to resign. But the finance minister had his
stomach full with six months of administration. Yanis Varoufakis wanted to have
no more of it. When he saw the results of the referendum, he immediately resigned,
saying that his presence would hinder the dialogue with European leaders.
What would be Tsipras’ next move on
the Greek chess board in which he is playing to lose and go home happily?
