Faced with another impasse, Alexis Tsipras might resort to a drastic measure, but heading to the polls could prove to be a tricky gamble, exposing Europe’s weaknesses.
Somewhere in Alexis Tsipras’ office there should be an inscription, stating in golden writing: ‘WHEN ALL ELSE FAILS, TRY HOLDING AN ELECTION.’ And boy, has all else failed.
After weeks of negotiations, held mostly behind closed doors at the Athens Hilton Hotel, between the Greek government and officials from the International Monetary Fund, the European Commission, the European Central Bank and the European Stability Mechanism, talks once again reached an impasse, the two sides failing to bridge differences over a set of contingency measures to be taken, on top of the ‘regular’ package already agreed upon.
Agreement would have greenlit a meeting of the Eurogroup (the 19 countries within the euro currency) to review the bailout program, unlock funding for Greece and pave the way for debt relief. Hopes are waning as Greece missed the second of the deadlines the government had set for a conclusion of the review; after missing an April 22 deadline, it was hoping for the Eurogroup to have unlocked bailout by May 1. Now the Eurogroup is set to meet on Monday 9 May, much to Greece’s disappointment.
Alexis Tsipras made a desperate attempt to persuade the European Council President, Donald Tusk, to call an extraordinary EU leaders’ summit to discuss the Greek program, but to no avail.
This leaves Greece in a dire state, once more cash-strapped, facing default by the end of June; according to several government sources, the government is already scraping the barrel, allocating any money left in insurance funds, public hospitals, municipal councils, the parliament and other public sector organisations to the Bank of Greece. Critics state that this desperate course of action has left the public hospitals in Greece with funds that can barely cover their needs for the next couple of weeks – reports of cancer patients unable to access treatment have been all too frequent, as of late.
It all unfolds as a deja-vu of last summer, when the Greek economy was gasping for air, while Tsipras and then minister of finance, Yanis Varoufakis, were once again entangled in negotiations, in what proved to be a risky game of chicken, leading to the near-collapse of the Greek banks.
And, once again, rumours of elections have begun to resurface, starting from the German media, then making the rounds throughout Europe. Various unofficial reports confirm that both the government and the opposition in Greece are gearing up for snap elections, which could take place as early as 12 June.
WHAT WOULD THE MANDATE BE?
It is unclear what the mandate of a snap election would be. Alexis Tsipras won two consecutive stand-offs – in January and September 2015 – with two completely opposite mandates, first promising to reject the package of reforms and austerity measures included in the bailout deals that have all but strangled Greece, then – after he failed in the process of negotiations – doing a U-turn and campaigning on the implementation of the measures they agreed upon.
Now both contenders seem to back the bailout deal and the only parties opposing austerity measures are neo-Nazi party Golden Dawn, the communist party and an array of small, leftist parties, most formerly affiliated with SYRIZA, with no hope of even entering the parliament.
With the opposition taking a slight lead in recent opinion polls, the only outcome that could be expected would be for a ND-led government of moderate pro-euro, pro-reform parties, or even for a government of ‘National Unity’, with a clear mandate to implement the set of – largely unpopular – reforms set out in the bailout deals: privatisations, slashing of wages and pensions, abolition of worker’s rights. There is only one reason for Tsipras to go down that road, given that there’s a big chance of him losing the elections, and that is to strong-arm EU officials into conceding to a favourable bailout review. With elections looming in Spain, after the Socialist majority failed to reach an agreement with the anti-austerity leftist party, Podemos (and was reluctant to form a government with the right-wing conservatives, for fear of meeting the fate of the Greek socialist party, PASOK, which has not recovered from forming a coalition with ND) – and, more importantly, with a UK referendum on whether to stay in the EU altogether scheduled in June, the last thing the EU wants is another front of instability, especially given the risk of a new win for Tsipras, if he opts to campaign for keeping austerity measures limited to what has already been agreed upon.
In a recent analysis, Bloomberg suggested another option for Tsipras: a referendum on the lenders’ proposals. This further enhances the deja-vu effect, reopening the recent wounds of last year’s referendum, when the Greek people expressed their opposition to the bailout deal, only to see the government ignore the outcome and concede to a set of harsher austerity measures that further crippled the middle class.
BENDING LAWS TO APPEASE THE MARKETS
Both options undermine whatever progress has been made so far in the talks between Greece and its lenders and leads the country to an almost certain default. Hence, pragmatists seem to agree that the situation leaves Tsipras with only one option: to concede to all the creditors’ demands. If only it were that simple.
Recent numbers show Greece showing a surplus, if only by a marginal 0.7 per cent of the GDP, and all sides agree that it has met its bailout commitments. The two sides have already agreed on ’95 per cent’ of upfront measures equal to three per cent of Greek GDP, but the lenders insist on Greece pre-emptively legislating additional belt-tightening measures equal to two per cent of gross domestic product, which would kick in automatically, if the government falls short of the budget targets envisaged in its bailout agreement.
Greece rejects this proposal as unconstitutional. Laws in Greece are voted to take effect immediately and cease effect only when another law is voted; there’s no provision for contingency legislation. The Greek side, has, in turn, proposed to establish a permanent budget correction mechanism, to be activated in case of deviations from targets, which would see to the implementation of €3.6 billion in standby measures, in case of failure to reach the primary surplus goals of 2018 and only then. This proposal has been met with sympathy by many among the European creditors, not least among them German Finance Minister Wolfgang Schäuble, but it has been met with resistance by the IMF. Trying to reconcile the two sides, Jeroen Dijsselbloem, who presides over the Eurogroup, acknowledged the “legal constraints” that the EU “can’t and won’t break”, while promising that a way around them can be found.
“We will design [the mechanism] in a way that delivers credibility … and (is) legally possible,” he said.
A THREAT TO EUROPEAN UNITY
It is this kind of attitude that has seen the EU institutions distancing themselves from the member states. When the states’ legislation is seen as irrelevant and the outcome of an election cannot affect the policy implemented on a country, then elections altogether become redundant, or worse, are reduced to becoming leverage in negotiations between opposing sides.
“Only a fool or an arsonist would want elections at this time,” stated Dimitris Papadimoulis, a SYRIZA MP, who is the vice-president of the European Parliament, echoing the prevailing view of elections as a factor of instability. Nothing would underline the EU’s political failure better than this kind of demonising of the election process as playing with fire, and this is precisely what gives Tsipras permission to use the elections ‘threat’ as leverage.
It’s a risky gamble for Greece: if it fails, the country once again faces the threat of being expelled from the eurozone, or even the EU altogether, left to deal with the refugee crisis on its own, becoming Europe’s dumping ground for desperate asylum seekers – an option that many in the EU welcome. But there is an even greater danger; by showing this kind of disdain towards member state laws and to elections in general, the EU practically devalues democracy as a whole, in favour of the financial doctrine imposed by the markets, via the IMF. Even a technocrat, Italian economist Mario Monti, who briefly served as his country’s PM to tackle the crisis, went on to express his concern that the EU is going through a crisis which would see it head towards disintegration.
The combination of the refugee crisis and the terrorist threat, topped by an ongoing financial instability, has put the EU under unprecedented pressure and the only winners so far are the nationalist movements and parties emerging throughout the continent.
Yes, somehow, playing with fire is the appropriate term to apply in this scenario.