The Guardian view on the Greek debt deal: victory or defeat?

Syriza had to climb down in Brussels but its readiness to go to the edge may still pay off politically

Editorial Sunday 22 February 2015 at The Guardian

Alexis Tsipras campaigned for office on the promise that he could both end Greece’s subservience to the humiliating fiscal and political conditions that the European Union had imposed on the country and keep Greece in the eurozone. Greeks wanted an end to austerity, and they wanted to retain the euro, seemingly contradictory desires. But they could have both, the Syriza leader implied, if they voted for a bold government ready to go to Brussels and take the game to the edge. A Greek exit from the euro would be such a huge disaster that the EU would, if pushed hard, be ready to give in. The Greeks went to Brussels and pushed, but in the end it was they who gave in.

Greeks seem to be in a mood to give Syriza credit for trying to change the terms of what is not now called the bailout
They got a few concessions, particularly on the primary surplus they are required to run, and some cosmetic changes in what things are called, the old vocabulary having become untouchable. But the same reality lies beneath. Greece still has to put together a schedule of reforms, to be presented on Monday and discussed over the week. On the face of it, Greek and EU objectives in this area are close: Syriza is pledged to battle tax evasion, to remodel the civil service, to streamline business regulation, and to create an accurate property register, for example.

But the Germans want detail, not rhetoric. It is not beyond the realms of possibility that the EU, under pressure from Germany and other northern countries, will send any programme back for more work if it feels it lacks substance. The EU would do well to resist that temptation, or to disguise the process in some way if it does, however. The last thing Greece needs right now is another public turn of the screw.

For the moment, at least, Greeks seem to be in a mood to give Syriza credit for trying to change the terms of what is not now to be called the bailout, and getting them softened in such a way as to give the government a little more flexibility in domestic spending. Mr Tsipras claims a “victory”. Greeks know there has been no victory, but they also know that the odds were heavily against Greece, and that the effort, although perhaps foolhardy, had to be made by a government that had made the promises it had.There is salve to national pride in thinking that they at least laid out the dangers of unalloyed austerity politics in Europe more starkly than before. Greeks are mightily relieved, too, that their banks have been saved from the collective crash that would undoubtedly have happened without a deal. So, while there will be some dissension within the ranks of Syriza – the old leftist hero Manolis Glezos has already apologised to the Greek people “because I took part in this illusion” – the chances are that the party will hang together, and stay relatively popular, particularly if it is able to reinstate some social spending.

But we will be back in front of the same gate as early as June, when the loan extension runs out again and when another stalemate threatens. Greece’s departure from the eurozone remains very much a possibility. True, it would be less of a disaster in the technical economic sense for the eurozone as a whole than in the past. Greek debt is now largely held by the European Central Bank, while the immmediate danger of “contagion”, of other southern countries following Greece out of the euro, is now deemed to be smaller.

But the impact on Greece itself could be chaotic, and a bad precedent for the euro. The impact on the European project of pushing out a country as historically and spiritually important to Europe as Greece would be dire. It would look like abandonment. It would look like victimisation. And it would look like bad management. The most benign outcome would be that the Syriza government starts delivering the reforms that the country would need whatever its circumstances, reforms that earlier governments often ducked, and then, later, gets the easing of debt that it also needs.

After all, the Greek economy has recently been growing, and unemployment falling, although admittedly from a very high level. Ironically, the Tsipras government’s greatest political asset may turn out to be not its readiness to tilt at Brussels windmills but that, while bearing no responsibility for the very harsh conditions that Greeks have had to endure in recent years, it is sitting on a potential economic recovery.

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