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December 6, 2021

Grexit or a European tragedy

Not many analysts – not to mention the European public opinion in a broad sense – have given the necessary attention to developments in the Greece – EU negotiations in the last months. At stake was avoiding the financial default of the Greek state by signing an agreement with the creditors, the alternative being Grexit, therefore the country’s exit of the eurozone, return to the national currency, drachma, with foreseeable consequences on the solidity of the EU and even Athens’ presence in the organisation.

Several were the reasons of this exaggerated lack of attention to the Greek dossier, although its evolution – one can see retrospectively – had a dose of danger that would have been easily perceptible. Most of the European public thought the EU project was so solid that a Greek defection – either in one way, leaving the eurozone, or in another way, exiting the EU entirely – could have not shaken it to the extent where it could endanger the current continental integration. On the other hand, the same public is used to a responsible national policy in Europe and a vision of the future that can be understood in a logical and predictable political language. If we consider the referendum in the UK, initially in 2017, but with a difference of a year after the recent election, we will see not just that the EU is warned about mutations in the British political landscape that call for the ‘in or out’ referendum proposed to the electorate. Which means that it is time for the EI to carefully calculate negotiations with London – already started by the new Cameron Government after the last May election – in order to identify the necessary ways to avoid a divorce. If it does happen, if the referendum takes place and the electorate wants out of the EU – the divorce should be civilised and keep necessary connection channels open to minimise loss on both sides and keep future communication and relations open. Of course, a notable reason is also that the Greek dossier was believed to be too little compared to other ones, the magnitude of which was a huge concern for the Western chancelleries and the EU Commission the past months. Those would be the Ukrainian crisis and the issue of keeping EU sanctions against Russia – already recently extended until the end of the year – or the unprecedented migration pressure on the Southern borders of the EU that has to withstand the inflow of migrants who found in the uncontrollable Libya both a ‘gateway’ and a ‘safe heaven’ for the militant Jihad. Compared to such huge challenges – see the dramatic intervention of the head of the Italian Government during the European Council and his cal to continental solidarity – the Greek dossier seemed to be of secondary importance. More attention was given to he visits made by the Greek Syriza Premier A. Tsipras to Moscow (or Russia) and his meetings with Russian President V. Putin, speculating on the possibility of a Kremlin action to destabilise the EU more than Athens’s intention to identify a reasonable way out of the current crisis. That the EU was expecting a feasible plan of reforms in the Greek economy in order to be able to honour its payment obligations and gain the kind of performance that would have met local welfare demands is a different story that pertains to a flawed integration at a European level about which we will speak in the end.

On Saturday, the Greek dossier exploded in front of the entire Europe, taking by surprise not necessarily because of the refusal of the Tsipras Government to accommodate the demands of the creditors – negotiations are with the EU, World Bank, IMF troika – but mostly because of the announced referendum on the issue of paying the debts which would take place next Sunday. A few notes on the referendum. Announced on Saturday, the Greek Parliament that was supposed to sanction it – the president having the ultimate decision, technically and constitutionally able to cancel it – did not have the question or questions that were going to be asked. Therefore, the haste of the announcement and the short term for the preparation of the referendum – a week – show not just the political dilettantism of the government – since this can no longer be a bluff., things being actually quite serious and cash withdrawals from ATMs in Greece and the overnight emptying of super-markets anticipate a major crisis obvious even to the Cabinet in Athens – but also the responsibility of its chief and of the ruling coalition. A Greek blog was rightly stating on Saturday: ‘This was a huge surprise as this basically was sticking up another middle finger to the European Institutions. By instating a referendum (to be held next Sunday), Tsipras tried to accomplish two things. First of all, he wanted to arm-wrestle the institutions into giving Greece an extension of a few weeks (which obviously didn’t work), but secondly it also looks like he was trying to cover his (political) ass by putting the responsibility of the decision on the shoulders of the (uninformed) citizens.” (http://www.zerohedge.com/). Secondly, the Hellenic Government, especially its head, A. Tsipras, prove an abandonment of responsibility hard to find anywhere else in the Greek and European history. Coming to power on the promise – that electrified the electorate – to come to a reasonable agreement with the creditors without endangering the presence of the country in the eurozone or the EU, the Tsipras Government is now casting the burden (and responsibility for the decision) on the shoulders of the nation not informed on the decision asked of it and that acts accordingly, milking the cash points and banks of and generating a new, much more dangerous crisis). It was expected that the announcement on the referendum made by Tsipras on Saturday would come with relevant arguments. But it was just another expectation in vain. The Greek newspaper ‘Kathimerini’ states: ” One would have at least expected that the burden of the decision would have made this address more profound and cautious. One would hope that a decision, which seriously risks throwing the country against the rocks, would be sufficiently substantiated, and that the address would somehow justify the decision. That the address would bequeath something for future generations to remember – regardless if it turned out to be a folly. But, alas, we heard nothing of that kind. What we got was gibberish, topped off with nationalist populism, typical of the speeches heard in university amphitheatres.”( A decision with no preparation, http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_27/06/2015_551585 )

What rests to be done facing this kind of situation? Again, the EU should act with caution, yet decisively, in order to avoid the Greek tragedy. ‘Plan B’ – therefore Grexit – is not in EU’s best interest even with the conduct of ‘student amphitheatre’ of the authorities in Athens. The outcome of an unprepared referendum held overnight trespasses the boundaries of responsible policy in the EU. On this latter subject, situations where the political environment in the member states could cause government teams incapable of making responsible decisions must therefore be thoroughly considered and legal and welcome ways to avoid, at a European level, for the common good (the algorithm for holding referenda or other types of national consultations could be agreed on, for instance, at a EU level). The urgency is to keep the integrity of the eurozone, avoid a large-scale crisis with unpredictable consequences along the Southern flank of Europe where other crises, much more dangerous, are on the doorstep or already present.







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