‘Greece Cannot Be Ruled Against the Will of its People’
Greece may now have passed the austerity measures demanded from the European Union and the International Monetary Fund, but the country’s political system is showing signs of stress. Additional pressure from Europe isn’t helping. German commentators warn that political radicalization cannot be ruled out.
Such skepticism also helps explain Berlin’s seeming lack of urgency when it comes to holding the required parliamentary vote on the new Greek aid package. The vote is now scheduled for Feb. 27, just three weeks before a €14.5 billion bond redemption that would push Athens into insolvency absent a bailout.
Berlin’s approach, however, is not without risk. Even as Athens has endured a political earthquake to push through the austerity demanded by Europe, Greece is also attempting to negotiate €100 billion in debt relief with its private creditors. The more Berlin and its partners hint that a Greek bankruptcy remains a possibility, the less eager those creditors are likely to be to voluntarily write down their holdings by up to 70 percent.
German Finance Minister Wolfgang Schäuble, for example, said on Monday that Europe was doing everything it could to avert a Greek insolvency. But, he added, the EU is “better prepared now than two years ago,” if that were to happen anyway. These are hardly reassuring words, particularly given the fact that no one is willing to predict exactly what the consequences of such a default might be.
Euro-zone finance ministers are meeting once again on Wednesday to examine the austerity package pushed through by Athens on Sunday night. German commentators on Tuesday offer their observations.
The center-left daily Süddeutsche Zeitung writes:
“The Greek parliament made a strong and courageous decision … and their austerity package deserves respect. Now that buildings are burning in Athens and parliament has fulfilled virtually all of the demands made by the EU, no euro-zone country can realistically refuse to provide aid. Germany’s parliament must also approve further bailout payments. Should there be significant resistance, Germany’s credibility in the world would lie in ruins. The time for opposition ended prior to the vote in Athens.”
“Those who would refuse additional aid to Athens and would push Greece into uncontrolled insolvency fail to recognized the financial interdependency (that exists in the euro zone) and underestimates the domino effect such an insolvency could trigger. In any case, help would have to be provided later when the collapse of the Greek banking system, capital flight and the economic ineptness of a dysfunctional state triggers a wave of refugees heading north.”
“Those in favor of a controlled insolvency must likewise admit the limits of their ability to predict the future. An orderly reintroduction of the drachma carries risks that are comparable to those of a disorderly bankruptcy. As such, it would be wise to wait to see the effects of the second bailout package.”
The Financial Times Deutschland writes:
“The Greek parliament has performed a masochistic show of strength: The representatives voted to approve the austerity program dictated by Europe. Following the vote, the socialists and the conservatives cleaned house, excluding a total of some 40 renegade lawmakers. The sacrifices made in Athens have become increasingly merciless.”
“The Greeks sense that they will be under the European yoke for years to come and will have to fear for their subsistence. Which also explains why the number of those preferring a state insolvency is growing — out of a conviction that things cannot get any worse. The protests will only become more frequent and violence is likely to become worse. Political radicalization will almost surely be the result of the parliamentary elections scheduled for April. With or without a puppet government — sooner or later the Euro Group must realize that Greece cannot be ruled against the will of its people.”
The left-leaning daily Die Tageszeitung writes:
“Greece’s party political system is threatening to collapse. Conservatives and Social Democrats both spent decades creating a system of clientelism to provide their supporters with all manner of benefits. For the most part, such rewards took the form of public sector jobs. Now, with the self-service system … finally shrinking — leaving the parties with fewer goodies to pass out — a significant reason for voting for these parties has vanished. In the coming campaign, there is little doubt that these parties will nonetheless seek to outdo each other with promises. But most Greeks have now become deaf to their pledges. And they are right. That could be a chance for alternative parties that want to finally put an end to the system of clientelism. But they also don’t have an easy solution to the economic crisis because there are no easy solutions. One cannot underestimate the danger that fringe parties could now benefit from the collapse of trust — from the neo-Stalinist left to the extreme right-wing nationalists. With their rigid austerity policies that renounced all investment aid, European leaders have provided these parties with valuable help.”
“No, there is no danger that a dictatorship will arise in Greece. But these are certainly not good times for democracy.”The center-right daily Frankfurter Allegemeine Zeitung writes:
“The passage of the latest austerity package in Greek parliament provides the country with breathing space, nothing more. The relief at the fact that Prime Minister Lucas Papademos was still able to get a significant parliamentary majority of 199 out of 300 votes is understandable. But the passage of the reforms is meaningless in comparison with the challenge of actually implementing them. In recent years, it has been the application of laws that has proven the greatest hurdle to reform and not the tumultuous parliamentary sessions that preceded their passage. And even if the laws were ably implemented, that still wouldn’t guarantee that the country could avert bankruptcy.”
— Charles Hawley