At the cost of national sovereignty and against the will of the Greek people, who just last week voted no in a referendum, the land where democracy was born capitulates and falls under dictatorship.
In politics, when two parties (or more) with starkly contrasting ideologies (i.e. Republicans and Democrats) agree on a deal, 99.9% of the time it’s the citizens who pay the price.
Don’t expect the Marxist Tsipras government to stay in power long.
A Greek exit from the eurozone has been avoided after a weekend of tough talks, but the political cost of arriving at a deal is likely to be felt for years to come.
After 18 hours of negotiations, culimnating six months of wider talks, euro leaders emerged bleary-eyed on Monday morning (13 July) to announce a deal that will, eventually, see Greece get a new bailout if it takes painful reforms and if it agrees to intense scrutiny at every step of the way.
The immediate result was summed up by European Commission president Jean-Claude Juncker.
“There will be no Grexit”, he said.
He noted that he’s happy with the “form and substance” of the deal, adding: “I don’t think the Greek people have been humiliated and I don’t think the other European leaders lost face”.
But despite his assessment, the deal represents capitulation on nearly all points for the left-wing Greek government, which was elected on a platform to stop austerity and which, just one week ago, held a referendum in which Greek people rejected creditors’ demands.
With trust between Athens and creditors almost non-existent, Greece is being told it must take “prior actions” by Wednesday, including new laws on VAT hikes, pension cuts, and statistical office reforms, as well as ratification of the summit’s entire, seven-page austerity blueprint.
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Another proviso in the summit deal includes the return of the creditor institutions’ officials, the widely-hated, formerly called “troika”, to Athens.
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Greek PM Alexis Tsipras also received next-to-no concessions on debt relief, which had – along with pensions and VAT – been one of his red lines.
What is called in EU jargon “nominal haircuts” were, once again, explicitly ruled out. Debt reprofiling will only be considered down the road “if necessary”.
The deal saw Germany – Greece’s biggest and most hardline eurozone creditor – receive flak on social media for pushing for such tough terms including a temporary eurozone exit, even after it was clear that Athens had backed down.
Berlin’s hardline stance is popular at home, where public opinion has hardened against Greece. But it split the eurozone.
A rift emerged between those who supported a more conciliatory and political line towards Greece (including France and Italy), and those who sided with Germany (such as Finland and the Netherlands) for a more rules-based approach.
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Asked whether she felt the EU is now a “German Europe” in light of the summit deal, Merkel said: “I did not have that impression this morning”.
Full article: Greece capitulates at EU summit (EU Observer)
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