The First Defeat

ATHENS/BERLIN/PARIS (Own report) – Germany’s imposition of its austerity policy suffered a first serious defeat in yesterday’s Greek referendum. Over 61 percent of the Greek voters rejected an agreement with the creditors that would have provided for a continuation of the German austerity measures. This defeat is all the more serious for Berlin, because German politicians had massively interfered in the Greek referendum debate. The decision whether there will be new negotiations – and if so, under what conditions – must now be taken. Whereas many Greeks celebrated the rejection of the austerity dictate yesterday evening, German politicians declared that it is “difficult to imagine” new negotiations with the government of Prime Minister Tsipras (the German Minister of the Economy, Sigmar Gabriel). Greece is heading toward a Grexit and a “humanitarian catastrophe” (Martin Schulz, President of the European Parliament). Paris however is risking conflict with Berlin. Yesterday evening, the governing Parti Socialiste (PS) took a clear stand “against the austerity measures,” which has “shriveled Greece’s Gross Domestic Product and driven a large number of Greeks into poverty.” Today’s meeting between the German chancellor and the French president may produce the first decisions.

The “No”

Germany’s imposition of an austerity policy suffered a first serious defeat with yesterday’s “No” in the Greek referendum. Aided by the EU, the ECB and the IMF, Germany has been able to impose its austerity dictate on Greece for the past five years, ruining the country’s economy and causing social devastation of appalling dimensions.[1] A clear majority of the Greek population has now clearly rejected that austerity dictate: Yesterday, more than 61 percent voted against the proposed agreement with Greece’s creditors, which would have prolonged the austerity policy, despite its catastrophic consequences. This clear rejection is all the more remarkable, due to the fact that not only had the Greek conservative establishment put its full weight behind a “Yes”, but even Germany and substantial parts of the EU had interfered in an unprecedented manner in the Greek referendum debate and had massively increased their pressure on the Greek population – up until yesterday.

Under Berlin’s Pressure

Over the past few days, German Finance Minister, Wolfgang Schäuble, was not the only one warning of a Grexit, if “No” wins. Obviously speculating that a clear majority of the Greek population would like to maintain the Euro, he was threatening Greece’s exclusion from the Euro to incite the population to vote “Yes.” Martin Schulz (SPD), President of the European Parliament, accused Prime Minister Alexis Tsipras of being “unpredictable and of manipulating the Greek people.” Already on Friday, Schulz decreed that, in the case of a “Yes,” Tsipras would logically have to resign and a cabinet made of technocrats (non-elected) would have to find “a reasonable agreement with the donors,” until new elections are held.[2] A few years ago, Berlin and Brussels had used a cabinet of technocrats not only in Greece but also in Italy respectively to impose the German austerity policy.[3] The German foreign minister finally chimed in on the attacks against the democratically elected Greek government. In a “mixture of inexperience, ideology and radial rhetoric,” Athens “has driven the negotiations to a dead end” while “ignoring the consequences of this course on the people in Greece,” Frank-Walter Steinmeier (SPD) claimed.[4] He advised Athens to seek a path that will not “encumber the EU and the members of the Euro zone.” Pressure on the Greek population had already been drastically increased by freezing the ECB emergency loans – imposed by Berlin [5] – and by mandatory capital controls.

EU’s Dominating Power

A renewed battle over Germany’s austerity dictate is in the offing. Chancellor Merkel is traveling to Paris Monday to discuss the consequences of the Greek referendum with President François Hollande. The other EU member countries will hardly be able to elude the expected agreement between Merkel and Hollande at the EU special summit announced for Tuesday. In spite of the serious German defeat in yesterday’s Greek referendum, the German Chancellor can go into negotiations conscious of the fact that Germany is dominating the EU, as never before.

Full article: The First Defeat (German Foreign Policy)

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