So Syriza won in Greece. It formed a new government in coalition with the small, rightwing Independent Greece party. Before the election Syriza announced a program that would have Greece stay in the Euro but renegotiate conditions for loans.
I hope that was a ploy. Yves Smith describes the difficulties with Syriza’s soft path:
The nut of that problem, as we will see, is that while may be a very estimable-sounding position, it may not be as pragmatic as it appears. Greece likely has better odds of winning concessions if it is less reasonable, since the Germans and the even more implacable Fins are convinced that the periphery countries are immoral beggars who deserve to be ground into the dust if they cannot or will not pay their debts. Greece is unlikely to be able to shake the perception in the North that they have the upper hand and can force Greece to heel, giving at most only fairly minor concessions.Greece’s best hope is if it there is an upsurge in popularity of other anti-austerity and anti-Eurozone parties in the rest of Europe. And they are more likely to rally support in the rest of the Eurozone if they take bold positions rather than careful, studied ones. And even then, that may not be enough for them to resolve the deep-seated problems they face. It isn’t simply that they face a very difficult challenge politically vis-a-vis the Troika, but that even if they get most of what they want, their policies do not look likely to generate enough demand to pull Greece out of its ditch.
Like Ian Welsh I would argue for Greece to take a harder course, at least during negotiations and, if those fail, to really walk the walk:
Greek debt is at a level which is effectively impossible to pay off and has been made much, much worse by all the “aid packages” and “bailouts” given by their “fellow” Europeans. (Aka. they should have defaulted years ago.)As for the Euro, Greece can’t print it, and Greece will need to print money.
I worry that Syriza is serious about negotiating on the debt. There is essentially no chance the Troika (well, really, Germany) will give them acceptable terms on a writedown. Negotiations should be intended only to go on long enough to demonstrate that a good deal is not possible. While they are ongoing, the Greeks should be preparing for Grexit and repatriating all the resources they can.
Greece would become another pariah of the “western” world and Ian, correctly in my view, thinks that is a position in which it is not alone and which can be used to Greece’s favor:
The media is playing this as an anti-austerity vote, and it is. But voting anti-austerity for a country like Greece which can’t feed itself, has no oil, and doesn’t have a lot of industry, is one thing: not being austere is another. If the Greeks want a decent life again, they will have to take on some of the most powerful nations in the world and at least fight to a draw.Many nations are in the same boat as Greece is: Russia, Iran, Venezuela, Argentina. Greece needs to make the necessary alliances with such countries and it needs to align with the rising Chinese block.
Doing this requires a psychological step that Greeks may be unwilling to take: a recognition that their interests do not lie with Europe; an understanding that Europeans are willing to see them impoverished, homeless and dead. Greeks who are living in the past and think the EU is about prosperity for everyone in the EU need to learn otherwise.
Syriza might go the more radical path. If not it is likely to fail and then the door will be open for the hard right to take power and to start wars to divert the attention from the ever falling economy.