Within the last week it certainly, as described here, looks as if Greece blinked and the German dominated EU wins. However, Greece still has a card left to play in this game: The economic nuclear option. This essentially entails a ‘Grexit’ that will possibly cripple the EU and set a precedent for other member nations. One should also consider that this would have an economic ripple effect on the entire world economy, not just Greece and the EU. This basically opens Pandora’s Box.
Brussels: Just a month ago, after being propelled to power by a wave of anger at Greece’s economic miseries, Alexis Tsipras declared his Syriza party’s election victory the start of a Europe-wide revolt against austerity. “Europe is going to change,” he said before setting off on a tour of European capitals to rally support for a more relaxed new direction.
The “anti-austerity revolution” proclaimed by Syriza and its fans elsewhere, however, has now fizzled, its passions doused by the political reality that leaders in the rest of Europe do not want to join or, more importantly, finance the Greek-led revolt.
An agreement to extend Greece’s bailout for four months reached late last week also committed it to honour fiscal targets and other conditions it had vowed to scrap and left intact the supervising role of the so-called troika — a trio of creditor bodies that Syriza wanted banished, viewing it as the hated symbol of their country’s subordination to so-called “neo-liberal” economic dogma.
Instead of scrapping the so-called memorandum, a package of austerity and other measures that Syriza had declared “dead”, Greece has pledged to “refrain from any rollback of measures” agreed to by previous governments, or “unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions”, the new euphemism for the troika.
Communist Tendency, a small far-left group inside Syriza, denounced the commitment as a betrayal of the working class and “submission to the blackmail of the troika”.
Finance Minister Wolfgang Schaeuble of Germany, who led opposition to Syriza’s demands for a thorough rethink of Greece’s bailout terms took a swipe at what he suggested had been the new Greek government’s dreamy illusions.
“Being in government is a date with reality, and reality is often not as nice as a dream,” said Mr Schaeuble, who has been pilloried in the Greek media as an unfeeling monster bent on deepening Greece’s economic suffering, which includes a catastrophic 25 percent contraction of the economy since 2010, along with unemployment of 26 per cent overall and above 50 per cent for youths.
Full article: Greece back-pedalling on anti-austerity push (The Age)