Greeks Don’t Want to Repay

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 Being a leftist party, their policies were naturally outdated and flawed.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?