The next four months will be crueller yet.
That will be clear from the debate in the Bundestag in Berlin. Although Chancellor Angela Merkel has never been outvoted in five years of policy decisions on the euro crisis and need not fear defeat on Friday, the endorsement will be grudging and will reek of suspicion of the Greek prime minister, Alexis Tsipras.
At least 25 of Merkel’s 311 MPs will oppose or abstain on the Greek rescue vote, in the largest act of dissent on Greece that Merkel has seen from her backbenchers.
Patience with Greece is running out in Berlin. It is also turning to exasperation because of what is seen as the intemperate tone of Tsipras and his team.
“There can be no reward for cheek,” said the bestselling Bildzeitung tabloid on Thursday under a one-word banner headline of “Nein, no more billions for greedy Greeks.”
Wolfgang Schäuble, the finance minister, told Merkel’s backbenchers that the new Greek government was manipulating eurozone largesse to “trample all over European solidarity”, Der Spiegel reported.
The Germans expect the Greeks, beneficiaries of a €240bn (£175bn) rescue, to be grateful. Instead they are seen to be impertinent. No sooner was the ink dry on the deal on Tuesday granting Athens a 17-week loan extension than its finance minister, Yanis Varoufakis, upped the ante and demanded the massive debt burden be partly written off.
Schäuble virtually accused the Tsipras team of lying. “The question now is whether one can believe the Greek government’s assurances or not. There’s a lot of doubt in Germany.”
The word in Brussels is that Schäuble and Varoufakis can hardly bear to be in the same room together. The confrontation looks certain to get worse over the next month as Tsipras sets out the fiscal and economic reforms he must enact to win the bailout extension and then, over the summer, a new package of financial aid.
That things have turned so sour so quickly is less than surprising. The big centrist governments of the eurozone were never likely to do any favours for a new hard-left Syriza movement dedicated to unpicking five years of German-led response to the crisis – fiscal consolidation or austerity. Why would they help Tsipras, seen by the mainstream as a dangerous demagogue? Besides, helping him would encourage others to follow suit and would mean admitting they got their reaction to the euro crisis wrong.
Whether the policies are working or not – and in Greece there are minimal signs of success – is beside the point. In the fight between Greece and its creditors, it is less about right than it is about might.
Can Tspiras stare down the combined forces of Germany and Spain, the European Central Bank and the International Monetary Fund? Is he picking a fight he cannot win, just as two of his predecessors gambled recklessly and lost? The precedents are not encouraging.
At the height of the Greek crisis in late 2011 and early 2012, George Papandreou, the centre-left prime minister, stunned Merkel and other eurozone leaders by announcing, without telling them first, that he was calling a national referendum on the outcome of his talks with the eurozone.
Europe’s leaders had spent weeks wrangling over the deal only to see it all possibly unravelling. Merkel and France’s Nicolas Sarkozy read Papandreou the riot act. If there was to be a plebiscite, Merkel insisted, the sole question would be whether Greece wants to stay in the single currency or not. That scenario would be repeated should Tsipras be boxed into a corner and decide to call a referendum.
Papandreou had to back down. There was no referendum. Within a week he was out of office.
A parallel fate awaited his centre-right successor, Antonis Samaras. The Germans and the eurozone insist that the four-month bailout extension means that Tsipras has to meet Greece’s obligations under the rescue pact, terms that Tsipras was elected to scrap.
As long ago as last June, Samaras essentially stopped delivering on the bailout terms and refused to negotiate with the reviled troika of officials from the European Union, the European Central Bank and the IMF. He resisted extending the bailout which was due to end in December, prolonging it in the end by a mere two months. He then engineered an early presidential election in Greece, but failed to get his nominee the job, triggering early parliamentary elections.
As with Papandreou, Samaras’ gamble backfired disastrously. He, too, lost the prime ministership.
Both men sought to challenge the eurozone and the Germans. They went down in a hail of hubris. Eurozone leaders detect similar mistakes by the Tsipras team already. On his first visit to Berlin to see Schäuble, Varoufakis suddenly started talking about the Nazis. That was unusual.
At his first EU summit, Tsipras declared to the Brussels press corps that the troika and the bailout were dead, precisely the opposite of what the same journalists were being told by the other participants.
Two completely opposed narratives – the one being aired in the Bundestag on Friday, the other being peddled daily in Athens – are in circulation thanks to the wordcraft of the drafters of last Friday’s deal extending the bailout.
Toxic terms such as “troika” and “bailout” have been banished, replaced by “the European institutions” and the “current arrangements”. This enables Tsipras to claim at home he has won a famous victory. And it allows Schäuble to argue that only the form has changed, but not the substance.
The change in wording matters, but probably not as much as Tsipras and Varoufakis claim. The biggest concession Tsipras won was the power to draw up his own economic reform agenda over the weekend, where Papandreou and Samaras were presented with detailed troika diktats. But under whatever name, the troika retains the authority to approve or reject the Greek proposals or demand changes. And in return for that concession, Tsipras has had to row back on many of his election pledges, a process likely to intensify in the months ahead. In seeking a loan extension, the Tsipras government has said that a planned rise in minimum wages would be delayed, there would be a clampdown on early retirement and completed privatisations would not be reversed.
There is much emphasis from the new government on battling corruption, tax evasion, and soaking the rich. But on Wednesday Varoufakis pointed to the difficulty of targeting Greece’s voracious oligarchs.
The country’s shipping magnates, for example, were “very mobile”, Varoufakis told Charlie Hebdo magazine in Paris. “It’s likely that their money will leave the country if they should be taxed.”
In a lengthy interview on a Greek radio station on Wednesday, Varoufakis bragged of serial victories over the Germans and eurozone finance ministers and of how the Tsipras tactics had split the Europeans.
“Discussion over debt restructuring will have to begin very swiftly,” he announced. “You know, they [eurozone] have asked me to stop talking about cancellation of the debt, but talk instead of its restructuring. Restructuring of the debt is exactly that – a debt reduction.I am not talking about prolongation. I am talking about swaps of the debt that will effectively decrease it to a very big extent.
“The fact that we no longer have this unified group against Greece, where the discussion about the debt was prohibited, and we now have a side that has broken down in many different sides – some of which are very open to our proposals – this by itself is a great success.”
In Berlin, this smacks of hubris.
This article was written by Ian Traynor in Brussels, for theguardian.com on Thursday 26th February 2015 17.15 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010