The Crucifixion of Greece is Killing the European
This attempt to turn Athens into a debt colony will fail – and open
the way to the breakup of the eurozone
By Seumas Milne
couldn’t have had a clearer demonstration of what
democracy now counts for in Europe than this week’s
immolation of Greece. In January, after five years of grinding
austerity imposed by the
troika of creditors had shrunk its economy by a quarter and
pushed millions into poverty, Greeks rebelled and
elected an anti-austerity government.
Following months of fruitless negotiations, the country voted last
reject the latest cuts, tax rises and privatisations demanded to
deal with the disastrous impact of the first phase of austerity. The
response of the eurozone’s masters was immediately to ratchet up the
pain still further. For the “breach of trust” of daring to put the
terms to its people, Athens was to be punished. So on Monday –
threatened with expulsion from the eurozone and economic collapse
courtesy of the
European Central Bank’s cash blockade – the Greek prime
minister, Alexis Tsipras, bent the knee.
In exchange for what is called a bailout, but is
in reality the imposition of new debts to pay existing creditors,
Greeks must hand over €50bn (£35bn) of public assets to an
“independent” privatisation fund. On top of that, they have to
inject more austerity into a shrinking economy and reverse any
legislation deemed unsuitable by the eurozone’s overlords – in other
words, the opposite of everything Tsipras and his Syriza party were
elected to do.
That’s why European officials were so keen to let
it be known that Tsipras had been
“crucified” and “mentally waterboarded”. Greece would be turned
into an economic “protectorate”, one purred, where all key decisions
would be taken by foreign governments and unelected EU bureaucrats.
No wonder Greek leaders declared that they had been subjected to a
coup, while the ex-finance minister
Yanis Varoufakis compared the “deal” to the Versailles treaty.
This is the diktat of a
bankers’ ramp that can barely tolerate even a facade of
That’s been a familiar pattern in the developing
world for decades, in the guise of IMF and World Bank structural
adjustment programmes. But the eurozone has now given it permanent
institutional form. The idea that this crisis has simply pitted one
democratic mandate – that of
Greece – against the hard-pressed taxpayers of 18 other eurozone
members is nonsense.
Not only have the loans that bailed out French and
German lenders, rather than Greece, been highly profitable. But the
real fear of eurozone governments is that if Greece’s rebellion
against austerity is rewarded, other European electorates will want
to go the same way. Which is
why Syriza must not only be defeated, but utterly crushed.
That this is about politics more than economics
should now be obvious. It’s not just that the austerity imposed on
Greece has delivered a 1930s-style depression, or that
Ukraine was recently bailed out with generous debt write-offs
but without any crucifixions or waterboarding. One part of the
troika, the IMF – dominated by a US anxious to keep Greece in the
Atlanticist camp – has now revealed it is well aware
Greece’s debts will never be repaid without massive relief and that
this week’s deal could swell them to more than 200% of GDP. In
other words, it won’t work. But pre-Keynesian balanced-budget
has the eurozone’s rulers in its grip, as they seek to overcome
the crisis by restoring corporate profitability.
It was Syriza’s commitment to opposing austerity
while remaining in the euro at all costs that led to capitulation.
What helped win the election became a fatal handicap in office, as
Tsipras resisted pressure even to make contingency plans for Grexit.
That would have strengthened his negotiating hand, as well as giving
Greece the option of escaping indefinite economic depression.
The short-term costs of exit would certainly be
harsh. But, combined with measures to take control of the economy
and tax the oligarchs, it at least offers the chance of longer-term
recovery. That’s now the view of many inside Syriza and beyond,
including those who voted against the eurozone diktat in the Greek
parliament yesterday, and support is likely to grow as economic
asphyxiation resumes. Otherwise, the far right will be the main
Either way, the fallout from what has happened
this week is likely to be momentous. Even if the latest deal is
softened and holds for a few months – under the formal aegis of a
wounded Syriza-led government, or not – it won’t last. Sooner or
Greece will be forced out of the euro, or leave of its own accord.
The only question is who will control that process.
Once that happens, and euro membership is seen to
be reversible, the future of the wider eurozone will be thrown into
half-baked currency union, without fiscal transfers or democratic
structures, cannot last. A eurozone nakedly dominated by one
state, Germany, enforcing destructive austerity on its vassals with
such brutality, can have no enduring legitimacy.
While it has benefited German capital, 16 years of
the euro have delivered
flat wages to German workers and
stagnant growth and productivity to countries such as Italy.
This week has made a mockery of monetary union as a path to a united
democratic Europe and opened the way for the eurozone’s breakup.
Once that process begins, expect the future of the
European Union itself, with the eurozone at its heart, to be put in
question. What kind of a union of partners treats one of its members
like a recalcitrant colony, destroys its economy if it steps out of
line, and dismisses its democracy as an impudent affront? In fact
one that has always ducked democratic accountability, embedded
deregulation and privatisation in treaties, and preferred to fix
policy – including the race-to-the-bottom
Transatlantic Trade Investment Partnership – with corporate
interests in secret.
It’s hardly surprising that hostility to the EU,
which shows no signs of being open to deep-seated reform, is growing
across the continent. Or that many progressive people in Britain,
previously attracted to what seemed its cooperative
are moving towards voting no in the planned in-out referendum in
the face of its brutal authoritarianism towards Greece. In their
zeal to discipline the eurozone, the continent’s elites are
killing their European project.
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