Will Europe let the Greek political centre fall?

A broken window in front of a poster featuring Euro banknotes

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With three days of campaigning left, what's important in the Greek election is what has not happened.

There has been no lifeline thrown to Antonis Samaras, leader of the conservative New Democracy (ND) party, from Brussels. No promise to tweak the austerity conditions. No Munich-style piece of paper for either Samaras or Pasok leader Evangelos Venizelos to wave, saying to voters: come back to the mainstream, we have gained concessions from the wider European polis.

Likewise, the soft power apparatus of euro conservatism has not deployed in support of ND. Nor is there any tangible foreign campaign to undermine, blacken or destabilise the far left party Syriza.

From this, and from numerous conversations with people inside the policy loop, I draw the following conclusion: Samaras is being hung out to dry.

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So Greece is no longer the front line of a global financial crisis: Spain - indeed the entire European banking system - is the front line.”

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If Germany does indeed have a plan, a vision for a post-crisis Europe, its actions are conveying the strong impression that Greece will not be part of it. George Osborne let this slip yesterday, when he said Greece leaving might help the Germans do what is necessary to stabilise eurozone fiscally.

Numerous contacts confirm this: German policy, de facto, is to force Greece to choose to leave. That would be a building block for a north European, stable eurozone, but only one stage in the process.

The problem is, Greece will only choose to leave if there is chaos. It would be a swift action, forced by bank defaults or non-payment of civil service wages, or the suspension of ECB liquidity support.

But the vast majority of Greeks don't want to leave. And there is no way of expelling Greece.

The problem, in the event of a Syriza victory, and a Syriza, Dem Left coalition with some Pasok MPs, is the gap between its aspiration to stay in the euro, and the maths of Syriza's programme.

Greek leader of the Radical Left (Syriza) coalition, Alexis Tsipras Many economists believe Syriza's economic plan for Greece does not add up

This involves a massive hike in the tax take to balance the books and stabilise the deficit. Most professional economists say it's unfeasible - the weakest link in a programme that is not ultimatist but not mainstream either.

That gap will either be filled through a post-election concession from Brussels and the IMF, or it will leave a Syriza-led coalition presiding over fiscal chaos.

One thing I don't think most Greeks have yet realised is the way the focus of EU policy has shifted to Spain.

There, the furious row over the terms of the bailout is still going on, with the Partido Popular again vetoing any attempt to launch an inquiry into Bankia. If the Spanish political elite - both main parties were implicated in the mismanagement of the cajas - thinks it can get away with things as normal, covering up the shocking collapse of a bank built on political patronage, then the Germans intend the Greek example to be a salutary lesson.

(Incidentally, unlike in Greece, numerous people I met in Spain in the last two weeks were quite cool about the euro: they know their economy could survive outside it, and that Brussels can't rip up the miles of road and railway track laid with EU structural funds.)

So Greece is no longer the front line of a global financial crisis: Spain - indeed the entire European banking system - is the front line.

The problem is, it may make economic sense for the EU mainstream to let the Greek centre collapse and force Greece into an exit crisis, but politically it will leave a bitter taste.

Because one of the reasons Greeks remain so wedded to the euro project is the international guarantee of governance it provides: a check and balance on crooked politicians. Another reason is they feel they have contributed to the project historically - not just through Athenian democracy but in the liberation struggle against the Ottoman Empire, and through the heroic resistance to Nazism which still haunts the memories of elderly people here.

If, by a series of actions and non-actions, Berlin and Brussels allow the political centre to collapse here, so that you get the first government of left communists, feminists and ecologists in a western country, while fascists roam the streets, pulling migrants out of hospital beds as threatened, that might not be seen as Europe's greatest act of statecraft.

It remains possible that you get a government of national unity with, as attempted before, ND, Pasok and the euro-communist Dem Left in coalition.

But all three of those parties still go into the election committed to a renegotiation of the austerity terms, so for such a last-ditch centrist government to cohere, Germany has to want Greece to stay in the Euro.

My sources within the euro policy world are indicating today, quite simply, that it does not.

Paul Mason Article written by Paul Mason Paul Mason Former economics editor, Newsnight

End of an era

After 12 years on Newsnight, Economics editor Paul Mason has moved on to pastures new and this blog is now closed.

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  • rate this

    Comment number 25.

    At the risk of being boring, the EZ/Commission are keeping to a simple script:
    1. It's up to the greek voters
    2. existing commitments must be honoured
    3. Greece is welcome to stay in the Eurozone.

    There is a wise convention, that ongoing elections in member states are off-limits. (Yes, it's sometimes breached, but with caution).

    Samaras is not being "hung out to dry". He's doing that by himself

  • rate this

    Comment number 24.

    Solidarity between EU nations is now shown to be a charade, a myth designed to expand the union by enticing prospective members with promises of unending material wealth.

    You see a person's, institution's or concept's true mettle most clearly when it is tested - when the going is tough. Like now.

    The EU wealth and solidarity promise is false, with no more substance than the dream it is.

  • rate this

    Comment number 23.

    Its all a bluff Paul.

    Germany wants Greece to stay, so it lets it be known that it wants Greece to leave via carefully placed leaks.

    Thus Greek people, thinking Germany wants them to leave will vote to stay, just to annoy them...when really all along thats what Germany wanted.

    Sneaky eh!

    The sad thing is I dont even know myself if I am joking or not such is the state of EU governance

  • rate this

    Comment number 22.

    Merkel, Barroso & co are playing a very dangerous game. They seem willing to push Greece into widespread instability at the level of society & livelihoods - just to make a point! They clearly do not care about the people but they could find this impossible to control - far less manageable than economic & governmental instability we have seen.

    They may not be able to confine it to Greece either.

  • rate this

    Comment number 21.

    It will be probably the first postwar opportunity for a coalition. Nobody knows if it is al all possible the 3 parties of centre and democratic left to bridge their differences. The name “measures” is a taboo word nobody wants to whisper even. So the 3 parties decided to use the name ‘reformed measures’ and probably many believe in this.

  • rate this

    Comment number 20.

    In Greece, the "political centre" is so corrupt that it is not worth saving. Even more than elsewhere, poor Greeks have been victimised to pay for this financial crisis, whereas virtually none of the elite who caused it have been punished.

    We should echo the placards in Athens: "The thieves to Gaol!" The longer this is delayed, the more likely lynch law becomes!

  • rate this

    Comment number 19.

    Something's got to give and take.

    If the north takes the exit for some PIIGS, they could give the EU structural funds as a growth instrument.

    The PIIGS take this and the lossening of austerity along with possible preferable trade agreements.

    Also the EU could also allow all candidate countries accession to EU increasing it's budget hopefully giving more security.

  • Comment number 18.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 17.

    This is all too serious and gloomy. I think an interlude is called for. How about a nice bit of Leslie Howard in 'Pimpernel Smith'


  • rate this

    Comment number 16.

    Angela @15
    Trying to be positive!
    What else?

    We all have betrayed 'democracy', and so ourselves

    What does it mean, if not Lincoln's "Of, for, by" The Equal People?

    'Equal' added: otherwise back to 'except the slaves' concept

  • rate this

    Comment number 15.

    Democracy was an athenian invention an it was never equal. We could discuss if it was even democracy in today's meaning. Unfortunately the Greek system collapsed not only because of greeks not paying taxes, corruption,and leaving far above their means but also of this living only in and with the long gone past.Or their glorious version of it.

  • rate this

    Comment number 14.

    'In trouble' we choose:
    'Austerity': poor poorer
    Or 'Share pain & gain': rationing
    Rations regulate & stabilise aggregate demand

    Deeper trouble:
    Nationalise all, & ration
    Or: stable benefits & steeper progressive tax

    Loyalties of police & forces sorely tried, by violence of some, in wake of mainstream protest

    But all should support revival of that Greek invention: Equal Democracy

    Greece LEADS

  • rate this

    Comment number 13.

    I do not think that there will be any political backlash. For the first two weeks after the exit from the EU, media will talk about Greece and the intolerable suffering and chaos that will break there.
    After that, they will move on to the next sensation and Greece will be forgotten, except maybe in Xmas appeals.The isolated geographical position will help that.

  • rate this

    Comment number 12.

    Mr Rajoy trumpets Spain’s bail out without conditions

    The Greeks demand their austerity-free 100bn euros

    The German electorate refuse to let Mrs Merkel give money to a country they see as lazy and dishonest

    Syriza forces a halt to the austerity in Greece

    Negotiations with the EU drag on and on

    The need to show that they are in charge means Greek politicians ask to leave the Euro


  • rate this

    Comment number 11.

    Let's paraphrase George W:

    `The trouble with the Greeks is they have no word for democracy.'

    Sorry about that, it just slipped out.

    I think we just have to view Greece as work in progress and hope for a constructive outcome. Either way there will be something for us to learn: such as praying, perhaps. It is all such a dreadful pity

  • rate this

    Comment number 10.


    1. The real decisions are being made by democratically elected national leaders, not unelected EU bureaucrats. Sarkozy was a bigger influence that Barroso.

    2. Who elected Mervin King or other BoE officials? Where's the democracy in QE here?

    We aren't much different. Critical parts of the system are deliberately undemocratic (or "independent of politics" in the parlance).

  • rate this

    Comment number 9.

    What throwing Greece to the dogs!
    I can't believe this will happen because it would bring chaos at a time when so many things need reform - like derivative regulation, short-selling, platform-trading. Maybe there are some BANKS that would like to see Greece exit; these BANKS LIKELY HAVE BETS against Greece.
    Western Finance needs fixing: Who can restructure? Who has the will?

  • rate this

    Comment number 8.

    As it is not democratically elected (and seems to be grabbing more and more powers away from sovereign nations) the danger of the EU becoming a playground bully is increasing exponentially as the situation deteriorates.

    I have watched as each and every member government of the EU looks the other way and blindly follows Germany.

    Where on earth is democracy in all of this?

  • rate this

    Comment number 7.

    Get a left government in power in Greece - a beacon for change to the other nations - Span, Italy, Eire & Portugal all have revolutionary traditions - if the EU lets this genie out of the bottle, revolt will spread fast - No to austerity!

  • rate this

    Comment number 6.

    Germans regard Helmut Kohl as their greatest Chancellor ever! Yet he led Germany into both the major monetary disasters. The first was to bring in the East German Mark on 1:1 parity with its Western cousin. This killed the former GDR economy. The next was to enter € for purely political reasons, ignoring its structural weaknesses & importantly ignoring that the Greeks & Italians were cheating.


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