|Ο Τσίπρας Σίσυφος (το σκίτσο του άρθρου του Guardian)|
To escape from economic hell, Greece needs Tsipras to call Germany’s bluff
If Athens stands firm and threatens to depart and default, Angela Merkel and the euro hardliners will almost certainly have to give ground
The parallels between the sad story of Sisyphus and the equally sad story of Greece are too obvious to require comment. Burdened with debts that are worth 175% of its national output and rising, Greece faces a vain struggle to escape from the economic Hades in which it has been struggling these past five years.
So when Alexis Tsipras, head of Greece’s new Syriza coalition government, says his country not only needs debt relief but demands it, he is right. Under the austerity conditions of the past half-decade, the Greek economy has shrunk by 25%. Living standards were 85% of the European average before the financial crisis; they are now down to 60%. The surprising thing about Greece is not that the people have voted for a radical alternative to the status quo, but that they were stoical for so long.
Tsipras’s challenge to the economic orthodoxy also makes sense. What Greece – and the indeed the entire eurozone – needs is not more austerity but stronger demand. Two numbers illustrate the abject failure of economic policy in the 19-nation single currency area: -0.6% and 11.4%. The first is the current inflation rate; the second the current jobless rate.
The new government in Athens has made its intentions clear. It has shelved privatisation plans. It has raised the minimum wage and announced moves to hire more civil servants. The message from Tsipras is that we want debt relief and an end to the economic squeeze, and we want them now.
There is, though, a complication. Greek voters also want to stay in the eurozone and the European Union, which means that Tsipras can get what he wants only through negotiations with his country’s creditors. That means doing a deal with the European Central Bank, the other members of the EU and the International Monetary Fund. Ultimately, it means doing a deal with Angela Merkel.
Tsipras’s best chance of avoiding a humiliating climbdown is to toughen his stance and threaten to leave the euro unless he gets Greece’s official debt reduced by, say, 50%. Indeed, unless he is prepared to do this, it’s hard to see why this leftwing prime minister chose a rightwing anti-German party as his coalition partner.David Marsh of the Official Monetary and Financial Institutions Forum wonders how Syriza is going to reconcile these three aims. Merkel and the other EU hardliners can see the inconsistency in Tsipras’s negotiating position. They are relatively relaxed about Greece because they know the tough talking has yet to start. Then they will say that if Greece wants to stay in the euro and wants ECB support for its shaky banks, it has to accept the terms set by its creditors, perhaps with some minor modifications.
The negotiating line should be as follows. Greece should never have been allowed to join the euro. The rest of the eurozone was complicit in this disastrous decision. The rest of the eurozone, including Germany, allowed Greece to live beyond its means. Life outside the euro would not be a bed of roses but would allow Greece to devalue and default. There would be big contagion risks. Does an already enfeebled eurozone really want that? If not, provide some serious relief.
To which Merkel and co might reply: leave then. But they almost certainly would not say that. For Tsipras, hanging tough is a risk worth taking.