Was there a better way for Syriza?

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Could Syriza have achieved a better outcome for Greece it they had adopted a different negotiating strategy? Many on the left are pondering this in the wake of the Greek Prime Minister’s acceptance of draconian new bailout terms. Greece is now effectively an economic colony, ruled by the European bankers and the German finance ministry. The nation’s immediate future is one of more austerity, more hardship, lower growth and an ever-rising debt.

Clearly, there was an alternative that could have been pursued: withdrawal from the euro. But the Greek government point blank refused to go down that track. As a consequence Syriza lost most of its bargaining power. In any negotiation if one party says that one particular outcome is absolutely vital to it, and the other party has the ability to deny that outcome, then the first party has little negotiating power on other outcomes. In this case Syriza said they absolutely had to stay in the euro and the European leaders, who had they power to kick them out, were consequently able to enforce their will on virtually every other point.

There seem to have been three reasons for Syriza’s unbending pro-euro stance. Firstly, there was the party’s ideological commitment to the euro as expressing its commitment to Europe. Secondly, most Greeks thought their country should stay in the euro, and Syriza’s pro-euro stance helped it win the January election and the July referendum. Thirdly, Syriza thought a transition to the drachma would be too difficult. Yesterday the Greek Reform Minister, George Katrougalous, said that an exit from the euro would have meant the “sudden death of our economy through the continuation of the closure of the banks.”

However, there are plenty of economists who argue that “Grexit” was (and still is) the best option for Greece, whatever the difficulties in a transition from euro to drachma. For a start, a devalued currency would make Greek exports and tourism more competitive. And Greece would be a sovereign country able to make its own decisions, not subject to the constraints of yesterday’s “agreement”. As Nobel Laureate Paul Krugman put it, “Grexit, terrifying as it is, would be better” than what the European leaders have come up with.

There is huge disappointment around the world at the setback in Greece, particularly coming so soon after a referendum where Greeks voted “no” to further austerity. But we shouldn’t get too disheartened. Most people are shocked by the ruthlessness and callousness of Europe’s financial and political elite. Defeats can demobilise people, but they can also inspire them to adopt better tactics and seek new solutions.

12 COMMENTS

  1. What happens when it fully dawns on the Greeks that voting processes, democracy itself, is now a charade?
    The rest of Europe’s population will take note and draw the obvious conclusions.
    So what future for democracy?
    Who will bother to participate in a pointless exercise.

  2. It seems that Greece was used as an example to others within the EU. A warning that says : Look what we did to Greece.
    When countries gave up their currency for the Euro, the controllers of the Euro then control those countries (the pawns). It was and will be about total control and total power. It is a continuing game of chess. The names of the power pieces can all be identified.

  3. The European Central Bank is calling the shots in the EU.

    Soon the TPPA and TTIP will call the shots for half the globe.

    • It gets more interesting: 18 June 2014, EU announced strategy for a New Adriatic and Ionian Macro-Region. Greece has been stomped on and told to behave, the peoples of Italy, France, Spain and Portugal have been persuaded that austerity is now the “norm”. Now the real power behind the EU are after the other side of the Mediterranean : Turkey, Syria, Lebanon, Egypt, Libya, Tunisia, Algeria, Morocco, Palestine (Gaza Strip). It’s a game of chess using real people.
      Israel and Monaco can be left out of the equation.

  4. One of the things I would fear with abruptly leaving the Euro is a Pinochet-style overthrow of the government, and the seizure of their assets anyway. They are between a stone and a hard place. In the seventies when communism was feared, they got the generals. Now that the faintest whisper of socialism is feared, they get the Troika. As Varoufakis observed, at least the generals left the assets in place. The sooner someone finds the key to bringing this economic tyranny to heel, the better.

    • I keep moving the chess pieces around the board and ask how is all the unrest in the Mediterranean/Middle East being funded. This is where Afghanistan becomes an important chess piece. The output of opium has skyrocketed since the invasion. It seems the addiction of our fellow human beings is funding most if not all.

  5. I didn’t know that Syriza had come to power on a mandate for staying in the Euro as well as no austerity. That certainly does make things harder for him. But one tactic that works in negotiations, which every child learns, is to play one squabbling faction off against another. If Syriza had threatened to approach China for help, then he could probably have got a much better deal.

  6. The Network of Corporate Global Control briefings from Karen Hudes, Acting Senior Counsel, World Bank, will track how it plays out for Greece, EU countries and globally. A game changer.

  7. Christine Laguarde has finally arrived to the rescue with the cavalry… The IMF is demanding debt write off for Greece.

  8. Just read todays Wake up New Zealand. it says in todays article that
    many numbers of countries have joined the BRICS alliance.
    They have invited Greece to join,hope they do . Maybe Syprias is playing games with EU. he can take the money and run and renege on the deal, after all Germany never paid back the money lent by Greece
    after the 2nd would war.
    If Greece joined the BRICS he can get a helping hand from them.
    The article claims the power in the world is waning and USA is on a downward slope, and gives the reasons why , good news at last.
    The American people are suffering like everyone else, so maybe if the elite regime is defeated the people can get their power back.
    Well worth reading .

    capcha,5×3=15

    • This is hilarious. So Tsipras is playing a clever game of political duplicity is he? Amazing that this seems to involve him screw the Greek financial system by closing the banks for a number of weeks and then passing laws that impose more austerity on the nation. When is he going to take the money and run then? Would this be after the assets have been transfered to the privatisation authority or before. I presume after he screws over the rest of the Eurozone and EU he doesn’t expect Greece to still be a member. Will he put that to a referendum or does Greek democracy not strech that far?

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