With their creditors circling and the IMF in particular apparently tired of negotiating (Inman et al, 2015), it does appear as if Greece is being bullied towards a Eurozone exit due to its unwillingness to sacrifice the country's dignity by slashing pensions (BBC, 2015).
Yet as bad as fears are that a 'Grexit' would be bad for Greece, and so might act as an incentive for it to agree to the terms of conservative austerity laid out by its creditors, their exit could be a lot worse for the Eurozone and those with a vested interest in its success (Garton Ash, 2015).
With debts due, and passed due, Greece has been scrambling to scrape together the funds needed to make repayments (Kirby, 2015). Without the repayments, Greece will not qualify for the bailout funds it needs to afford continued debt payments and to run the country.
Alexis Tsipras, the Prime Minister of Greece from the Radical Left Syriza party, has remained determined to resist the pressure from creditors for conservative economic reforms in exchange for the bailout (BBC, 2015). Tsipras has been attempting to negotiate the terms of the bailouts and the repayments, in opposition to the deep public sector cuts expected by creditors. Europe's rivals are already circling. China has a major interest in Greece, via its stake in the port at Piraeus (Smith, 2015), and, in what has been seen as a negotiation tactic, Greece has even held talks with the Russian government (Christides, 2015).
But on top of the demands of creditors, there have been warnings to Greece of the dangers and consequences of defaulting on its debt and leaving the Eurozone (Khan 2015). There are fears that a newly introduced currency would plummet in value quickly against the value of the Euro, and that this could result an effective pay cut for ordinary citizens of as much as 50% (The Hamilton Spectator, 2012).
Between being bludgeoned with creditor demands and being warned of the danger of default and withdrawal from the Eurozone, the present situation has the feeling of a deliberate strategy designed to diminish the negotiating power of Greece, and back the country into a corner. By bullying Greece into a corner, it would certainly be a lot easier to force the country to reform in a particular way - notably conservative and austerian (Jones, 2015).
That situation is being compounded by the pressure that Alexis Tsipras faces from his own supporters at home over electoral promises to reinstate the public sector's role and to protect pensions (Morris, 2015).
However, the determination to force Greece into playing by the conservative rules or face a damaging exit looks like a dangerous game for those with an interest in the Eurozone to be playing. It has been noted that, rather than talk of solidarity with the Greek people in their time of need, the attitude of negotiators has been of cold "matter-of-fact talks that take place when a big indebted business gets into trouble" (Peston, 2015).
If that attitude were allowed to force Greece out, then something very stark will have been stated about the Eurozone: that it is only for the 'economic convenience' of certain members, and that it is not necessarily for everyone - something that would surely undermine the future of the Euro.
With the Euro's future undermined, the Eurozone project itself could be undermined (Garton Ash, 2015). If one debt ridden nation might default and withdraw to pay off its debts with a new devalued currency, are creditors to other economically weak European countries with substantial debts going to refrain from increasing their demands - thus increasing pressures across Europe.
For what its worth, the attitude of Yanis Varoufakis, the finance minister of Greece, has been that Greece should not leave, instead seeking to reform the old system (J. Luis Martin, 2015). Varoufakis has talked at length about the need to work within the old system to arrest the dangerous social impact of the conservative austerity agenda and the crises that result, from which progressives do not benefit (Varoufakis, 2015). That means supporting a 'modest agenda for stabilising a system that I criticise', in order to 'minimise the unnecessary human toll from this crisis'.
Yet as bad as fears are that a 'Grexit' would be bad for Greece, and so might act as an incentive for it to agree to the terms of conservative austerity laid out by its creditors, their exit could be a lot worse for the Eurozone and those with a vested interest in its success (Garton Ash, 2015).
With debts due, and passed due, Greece has been scrambling to scrape together the funds needed to make repayments (Kirby, 2015). Without the repayments, Greece will not qualify for the bailout funds it needs to afford continued debt payments and to run the country.
Alexis Tsipras, the Prime Minister of Greece from the Radical Left Syriza party, has remained determined to resist the pressure from creditors for conservative economic reforms in exchange for the bailout (BBC, 2015). Tsipras has been attempting to negotiate the terms of the bailouts and the repayments, in opposition to the deep public sector cuts expected by creditors. Europe's rivals are already circling. China has a major interest in Greece, via its stake in the port at Piraeus (Smith, 2015), and, in what has been seen as a negotiation tactic, Greece has even held talks with the Russian government (Christides, 2015).
But on top of the demands of creditors, there have been warnings to Greece of the dangers and consequences of defaulting on its debt and leaving the Eurozone (Khan 2015). There are fears that a newly introduced currency would plummet in value quickly against the value of the Euro, and that this could result an effective pay cut for ordinary citizens of as much as 50% (The Hamilton Spectator, 2012).
Between being bludgeoned with creditor demands and being warned of the danger of default and withdrawal from the Eurozone, the present situation has the feeling of a deliberate strategy designed to diminish the negotiating power of Greece, and back the country into a corner. By bullying Greece into a corner, it would certainly be a lot easier to force the country to reform in a particular way - notably conservative and austerian (Jones, 2015).
That situation is being compounded by the pressure that Alexis Tsipras faces from his own supporters at home over electoral promises to reinstate the public sector's role and to protect pensions (Morris, 2015).
However, the determination to force Greece into playing by the conservative rules or face a damaging exit looks like a dangerous game for those with an interest in the Eurozone to be playing. It has been noted that, rather than talk of solidarity with the Greek people in their time of need, the attitude of negotiators has been of cold "matter-of-fact talks that take place when a big indebted business gets into trouble" (Peston, 2015).
If that attitude were allowed to force Greece out, then something very stark will have been stated about the Eurozone: that it is only for the 'economic convenience' of certain members, and that it is not necessarily for everyone - something that would surely undermine the future of the Euro.
With the Euro's future undermined, the Eurozone project itself could be undermined (Garton Ash, 2015). If one debt ridden nation might default and withdraw to pay off its debts with a new devalued currency, are creditors to other economically weak European countries with substantial debts going to refrain from increasing their demands - thus increasing pressures across Europe.
For what its worth, the attitude of Yanis Varoufakis, the finance minister of Greece, has been that Greece should not leave, instead seeking to reform the old system (J. Luis Martin, 2015). Varoufakis has talked at length about the need to work within the old system to arrest the dangerous social impact of the conservative austerity agenda and the crises that result, from which progressives do not benefit (Varoufakis, 2015). That means supporting a 'modest agenda for stabilising a system that I criticise', in order to 'minimise the unnecessary human toll from this crisis'.
Though Tsipras and Varoufakis have been unwilling to give ground on issues like pensions, tied to the welfare of a currently struggling people and key party election promises, they have shown a willingness to negotiate. Considering that while leaving the Eurozone is clearly not ideal for Greece, and reforms to the system would be preferable, an exit would at least mean more freedom over its own economic affairs - though it would purchase that freedom at a very high cost for to its citizens - their unwillingness to leave, has at least been a show of a constructive attitude.
For the Eurozone, however, there would be less of a sunny side. A Greek exit would undermine the Eurozone itself, severely weakening what has become one of the most recognisable cornerstones of European project by cast doubts upon other debt-beleaguered Eurozone nations. For now, the conservative austerians remain in charge and it is they who will continue to dictate the narrative of negotiations in Greece according to their own ideological terms.
Yet saving the Eurozone will need Greece's creditors to show some reciprocal goodwill. Through cooperation and reciprocity, there remains an alternative and progressive way out of the present crisis, where the common good can be placed at the heart of economic action.
References
Phillip Inman, Graeme Wearden & Helena Smith's 'IMF walks out of Greece bailout talks'; in The Guardian; 11 June 2015.
'Greece crisis: PM Tsipras tells creditors to 'get real''; on the BBC; 15 June 2015.
Timothy Garton Ash's 'Europe must save Greece to save itself'; in The Guardian; 15 June 2015.
Paul Kirby's 'Is Greece close to Grexit?'; on the BBC; 10 June 2015.
Helena Smith's 'Greece’s port in a storm: anger as Syriza stops China extending hold on Piraeus'; in The Guardian; 9 February 2015.
Giorgios Christides' 'Could Europe lose Greece to Russia?'; on the BBC; 12 March 2015.
Mehreen Khan's 'IMF warns of Grexit threat as judgment day approaches'; in The Telegraph; 28 May 2015.
'Greece’s euro exit a recipe for hardship'; in The Hamilton Spectator; 25 May 2012.
Chris Morris' 'Greece debt crisis: Tsipras's impossible position'; on the BBC; 11 June 2015.
Owen Jones' 'We must stop Angela Merkel’s bullying – or let the forces of austerity win'; in The Guardian; 28 January 2015.
Robert Peston's 'Greece isn't any old troubled debtor'; on the BBC; 15 June 2015.
J. Luis Martin's 'Yanis Varoufakis: 'Greece will neither want to leave the euro nor threaten to do so''; on Open Democracy; 12 January 2015.
Yanis Varoufakis' 'How I became an erratic Marxist'; in The Guardian; 18 February 2015; adapted from a lecture originally delivered at the 6th Subversive Festival in Zagreb in 2013.
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