The scope of the Greek defeat


Jan Blommaert

(translation: Adelei van der Velden)

The chronicle of bad decisions in Brussels and Athens has produced a small interim decision. After 17 hours of discussions by a group of weary, impatient, irrational and biased people, there is an “agreement” signed with Greece (see link below). Juncker calls this “agreement” a “win-win” situation “without winners or losers”, which according to Michel even has “hope” and “optimism” to offer. For whom, is the question.

Tsipras takes a series of demands back to Athens only to find their match in the requirements imposed on Germany by the Treaty of Versailles. The most urgent requirements are well known (tax reform, pension reform, etc.) and note that all these things are expressed in the most vague terminology (“broadening the tax base” for example, or “Modernizing Governance”, or constant references to “best practices” in the OECD or even “Internationally” – more vague is unfeasible), so there is plenty of room for manipulation in interpretation of actions and results.

Note also that the Greek vision included a number of important points (a) it  revolved around a tax shift from poor to rich. On this the document says virtually nothing, except for the aforementioned super vague “broadening the tax base”. Those measures, as we shall see later, are fully subject to the approval of the Troika. (b) Strengthening of the government, rather than a reduction of it, and (c) the entire Greek democratic control over the economic recovery plans, while international partners kept a say in the financial recovery plan. In addition, certain items were rejected a priori, while other proposals (the primary surplus, for instance) were stressed.

Note that these issues were also preserved in the “final proposals” of Tsipras to the Euro zone, as I explained in an earlier piece. That explains why these proposals were not a “capitulation”: they followed up on the approach already started in the proposals brought forth by Varoufakis in February this year. That this can not be seen as a submission to Europe was also apparent, needless to say, from the fact that it took 17 hours before the EU was able to define a position, and that this position is completely different from the Greek proposals, issued from February until last week. Only the current agreement is a defeat, and a defeat of enormous proportions.

Let us see what remains of the former Greek points, and what the Greeks now have to swallow.

  1. In the urgent demands there are the two points that were expressly rejected in February by Varoufakis as measures that would only deepen the recession: using VAT as an instrument, and reducing or delaying pensions. These expressly rejected items now need to be implemented. Also the privatizations, of which Varoufakis said they should be considered on a case by case basis, have been torn from the hands of the Greeks – not officially (Tsipras will explain that it is the Greek government that will do so) but effectively they are, because the EU is supervising the privatization and assesses their ‘implementation’ in a binding way.
  2. There is no longer a reduction of the primary surplus – another core requirement of Varoufakis in February. The structure of this surplus through an absurd 4.5% of GDP determines the rhythm of the budgets, and thus the austerity. Varoufakis proposed to reduce it to 1.5%. The document gives no figures, but “ambitious targets” which, if not met, should lead to “quasi-automatic spending cuts”. Moreover, this must be cast in a law by Wednesday. Needless to say that the Greeks are not the only ones who have a say in this: everything is under strict supervision.

“• full implementation of the relevant provisions of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, in particular by making the Fiscal Council operational before finalizing the MoU and introducing quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets after seeking advice from the Fiscal Council and subject to prior approval of the Institutions;”

  1. Furthermore theFebruarysectiononthelabor market has disappeared, in which the Greekswanted to followthe recommendations of theInternational Labor Organization. Whatwehavenowis this:

“• on labour markets, undertake rigorous reviews and modernisation of collective bargaining, industrial action and, in line with the relevant EU directive and best practice, collective dismissals, along the timetable and the approach agreed with the Institutions. On the basis of these reviews, labour market policies should be aligned with international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth;”

In plain language: collective labour agreements and the right to strike should submit to the chains. In a country where wages have fallen enormously, this is disastrous. And organized civil society also ceases to exist as a force in labour relations.

  1. Here we seeimmediatelyhow wide theEU conceives “economic policy”. EVERYTHINGfallsunder this label. While oneofthe fundamental elements ofthe Februarytext by Varoufakiswas thathe made adistinctionbetweena “financial” problem (in which others mayhavetheirsay) and”economic” problems(in which theGreek governmentis the onlyresponsibleactor).Thisdistinctionisreplaced here bytheclassicalelastic concept that”economic” is defined so broadly that it covers allpossible policies.
  2. That isthe next point.WhileSYRIZAexplicitlyrejected theinfluenceofthe Troika, a rejection to which itowed itsvictory, the Troikais back andstronger than ever.The Greekshave toswallowanunprecedentedmeasure, as you can read below.

“• to fully normalize working methods with the Institutions [= the Trojka] (…) The government needs to consult and agree with the Institutions on all draft legislation in relevant areas with adequate time before submitting it for public consultation or to Parliament.”

First, who decides what is ‘relevant’? Probably not Tsipras. Secondly, it is un-be-lie-va-ble that a political EU meeting imposes on a Member State to switch off its parliament and reduce it to a formalism. Legislative work is defined here as something that begins with the government, then goes to the Troika, and then finally to parliament (where amendments may again have to pass through the Troika). While we thought the parliament was the “legislator” in a democracy. The Troika checks here both the government and the parliament. It is indescribable that the EU imposes such a way to operate. And this is called NORMALIZATION of the methods of cooperation with the Troika. So this is “normal.”

  1. Moreover,andeven more mind-boggling: the Greekshave to roll back laws that were voted democratically:

“With the exception of the humanitarian crisis bill, the Greek government will reexamine with a view to amending legislations that were introduced counter to the February 20 agreement by backtracking on previous programme commitments or identify clear compensatory equivalents for the vested rights that were subsequently created.”

So, the Greek rule of law ceases to exist. A law that has been approved in a sovereign country can now be canceled by unelected external forces voted. Never demonstrated before in the EU.

  1. Tsiprassays this all is compensated by two things: an aid packageandadebt restructuring. As forthe aid program:watch how conditionally this has been formulated: thesummit”takes note” of a “possible” aid program, it asksthe Troikato examinehowthe aid packagecan be reduced(!!)through measures which further erode theroleof the GreekGovernment, and points tothe fact thatmoreneoliberalism allows for less support.

“The Euro Summit takes note of the possible programme financing needs of between EUR 82 and 86bn, as assessed by the Institutions. It invites the Institutions to explore possibilities to reduce the financing envelope, through an alternative fiscal path or higher privatisation proceeds. Restoring market access, which is an objective of any financial assistance programme, lowers the need to draw on the total financing envelope.”

  1. With regard to debt restructuring, this is also just a “rain check”. The Eurogroup is “ready to examine” whether there are “possible” and “necessary” “complementary measures” to be taken regarding the debt. BUT: (a) what is possible is just delay or spreading of the debt payments; (b) completely depending on the “full execution” from the rest of the agreement, and (c) with exception of real debt cancellation.

“Against this background, in the context of a possible future ESM programme, and in line with the spirit of the Eurogroup statement of November 2012, the Eurogroup stands ready to consider, if necessary, possible additional measures (possible longer grace and payment periods) aiming at ensuring that gross financing needs remain at a sustainable level. These measures will be conditional upon full implementation of the measures to be agreed in a possible new programme and will be considered after the first positive completion of a review. The Euro Summit stresses that nominal haircuts on the debt cannot be undertaken.”

Conclusion: there is simply nothing left anymore of the views of SYRIZA before and during the elections, of their Government Declaration, and even of  the plan by Varoufakis of February, which in itself was a major break with what went before.

The role of the Troika is even more extended, and Greece as legal construction is now fully in the position of a protectorate. Its executive power is controlled by the Troika, which takes all legislative work from the hands of the parliament. End of the democratic institutions as we know them.

The content of the agreement does not contain a single core element anymore of the plan Varoufakis submitted to the Euro zone in February. Every fundamental issue has been removed and replaced by perfectly orthodox neoliberal positions. It asks Syriza to destroy trade unions, to make the labor market entirely flexible, to sell off public assets, reduce or delay pensions. Of a more efficient Greek government remains nothing: the government is now back in Brussels and Washington, not in Athens.

And en route this informal club of State and Government leaders has on top of this abolished the sovereignty of an EU Member State, cancelled its rule of law, and rejected the cornerstone of Western democracy – the separation of powers. Surely something that creates “hope and optimism”. Until the day the same is applied to their own country.




Author: jmeblommaert

Taalkundig antropoloog-sociolinguist, hoogleraar Taal, Cultuur en Globalisering aan Tilburg University. Politiek publicist.

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