European integration has been built on compromise. So there is huge pressure on Greece’s new Syriza government to be “good Europeans” and compromise on their demands for debt justice from their European “partners” – also known as creditors. But sometimes compromise is the wrong course of action. Sometimes you need to take a stand.
While Greece alone may not be able to change the entire monetary union, it could act as a catalyst for the growing political backlash against the eurozone’s stagnation policies. For the first time in years, there is hope that the dead hand of Merkelism can be unclasped, not just fear of the consequences and nationalist loathing.
More immediately, Greece can save itself. Left in the clutches of its EU creditors, it is not destined for the sunlit uplands of recovery, but for the enduring misery of debt bondage. So the four-point plan put forward by its new finance minister, Yanis Varoufakis, is eminently sensible. This involves running a smaller primary surplus – that is a budget surplus, excluding interest payments – of 1.5% of GDP a year, instead of 3% this year and 4.5% thereafter. Some of the spare funds would be used to alleviate Greece’s humanitarian emergency. Greece’s crushing debts of more than 175% of GDP would be relieved by swapping the loans from eurozone governments for less burdensome obligations with payments tied to Greece’s GDP growth. Last but not least, Syriza wants to genuinely reform the economy, with the help of the Organisation for Economic Co-operation and Development (OECD), notably by tackling the corrupt, clientelist political system, cracking down on tax evasion and breaking the power of the “oligarchs” who have a stranglehold over the Greek economy.
Had the Varoufakis plan been put forward by an investment banker, it would have been perceived as perfectly reasonable. Yet in the parallel universe inhabited by Germany’s finance minister Wolfgang Schäuble, such demands are seen as “irresponsible”: Greece must be bled dry to service its foreign creditors in the name of European solidarity.
The eurozone establishment and much of the media think Greece is foolish to stand up to Germany. But what would be truly foolish is giving in. That would leave only the neo-Nazis of Golden Dawn in the anti-Merkelism camp. So long as the Greek government is willing to stand firm – as a vast majority of Greeks and many Europeans are urging it to – it can obtain a fairer deal for the Greek people and, with luck, the eurozone.
Please spread the word about our petition for debt justice for Greece. http://www.europeanspring.org/debtjusticegreece
Now, more than ever, it’s vital to make our voices heard.