Opinion: The End of the Greek Tragedy?

By Joaquín Roy Reprint | | Print |

In this column, Joaquín Roy, Jean Monnet Professor of European Integration and Director of the European Union Centre at the University of Miami, argues that the decisive result of the Greek referendum has opened a new chapter not only for the future of Greece, but also in terms of the essence of the European Union itself, which will have to abandon its eternal habit of brinkmanship and coming to last-minute arrangements.

BARCELONA, Jul 7 2015 (IPS) - The decisive result of the Greek referendum held Jul. 5, in which voters overwhelmingly rejected (61.3 to 38.7 percent) the terms of an international bailout, has opened a new chapter not only for the future of Greece, but also in terms of the essence of the European Union itself.

Paradoxically, the future of the euro may become a secondary issue.

Joaquín Roy

In the coming week, the pages will be turned on some chapters of European history that had been regarded as a fixed part of the script.

The fact that, in their time, previous Greek governments blatantly misrepresented the country’s financial situation in order to secure entry into the euro zone will have to be put aside.

The authorities in Brussels will have to be forgiven for turning a blind eye so that the country using the world’s oldest existing currency, and that had founded a mythical democracy, should not be excluded from the inaugural party of Europe’s spectacular expansion.

The eternal European habit of brinkmanship and coming to last-minute arrangements – so that summits produce neither winners nor losers, but everyone can go home feeling vindicated – will have to be given up for practical reasons.

This battle may still cause significant damage and a high number of casualties.

In the first place, although the voting reflects clear overall rejection of E.U. impositions, Greek society remains dangerously divided on the choice presented to it by Prime Minister Alexis Tsipras. The problems the Greek people face in their daily lives will not disappear after the referendum.

Those who voted in favour of accepting the conditions of the European institutions and the International Monetary Fund (IMF) will blame those who backed Tsipras for the costs they will all have to bear. Those who voted No and “won” the contest may well feel disappointed when they see the economic situation worsening, or not noticeably improving.

The referendum results indicate that conservatives and the middle classes decided to support the bailout conditions because they at least had some assets. On the other hand, the majority of people who have nothing, or who have lost nearly everything, preferred to carry on the struggle and reject E.U. pressures.

It is worth noting that the proportion of No votes in the referendum was higher than the proportion of ballots cast for the left-wing Tsipras in the recent elections that propelled his party to power.

If there is no new bailout or a massive debt write-off, the government may be forced by its inability to satisfy the citizenry’s demands to choose between two evils. On the one hand it may have to accept the humiliation of urgent humanitarian aid from the European Union, as has been suggested at the eleventh hour. On the other hand, it might take the dangerous path of seeking protection from external interests, as recent overtures towards Moscow appear to indicate.

E.U. leaders may pursue the threats they made in the final hours of the referendum campaign. The president of the European Parliament, Martin Schulz, might have found himself in the uncomfortable position of having to take action to back up his last-minute arguments about the dire consequences of exiting the euro. Now, however, he has backed down and appears to be leaning toward negotiation.

Other E.U. leaders are also in awkward positions. Where will European Council President Donald Tusk and Commission President Jean-Claude Juncker be if Berlin’s hard line prevails?

Or conversely, where will everyone be if traditional negotiation and classic compromise are now being reconsidered?

A traditional forecast is that the European leaders in Brussels, backed by the IMF, will opt for negotiation, because they do not want to go down in history as participants in a conflict with unpredictable consequences. It does not suit the Greek prime minister to overstep the mark, either, and he could therefore make the European Union an offer it cannot refuse. For their part, German Chancellor Angela Merkel and other holders of the enormous debt know that if Greece exits the euro, repayment will be impossible.

In the distance, the United States has expressed concern over the development of this process. Economic convulsion in Europe is not in the interests of Washington; moreover, from its standpoint, two issues are crucial for preventing damage from spilling over into other vital dimensions.

The first is the threat that Greece may be tempted to drift into the sphere of Russia’s protection.

The second is the disturbing sight of the European Union under a divided leadership and with damaged financial underpinnings at the height of negotiations for the proposed Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement between the European Union and the United States.

Indecisive leaders in Europe will make it very difficult for U.S. President Barack Obama to exercise his negotiation mandate granted by Congress, increasing the likelihood that the project will be delayed until a new U.S. president takes office.

In conclusion, the decisions taken now in Brussels and other European capitals will determine whether or not there will be further harm to the essence of the European Union – and to the euro, the jewel in the crown and the cause of the whole drama. (END/COLUMNIST SERVICE)

Edited by Pablo Piacentini/Phil Harris   

Translated by Valerie Dee

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service.