Syriza Shouldn't Underestimate Merkel
It's widely assumed that the European Union will cave to Greek demands to write off some of Greece's debt. What, however, if it doesn't? A Greek exit from the euro and even the European Union is not the only alternative: The fall of the far-left Syriza government in Greece is another distinct possibility. The EU's ponderous, compromise-prone decision-making machine can be tough when challenged by mavericks -- just ask David Cameron or Plamen Oresharski.
When Alexis Tsipras visited a World War II memorial shortly after becoming prime minister to remind Germany that it owes Greece for Hitler-era crimes, German Chancellor Angela Merkel probably could not help but see it as an extension of Syriza's earlier rhetoric comparing her government to the Nazis. It should be no wonder German Finance Minister Wolfgang Schaeuble is unwilling to discuss writing off Greek debt after Syriza's newspaper described him as a "Gauleiter" and no one from the Greek leadership addressed the insult.
Instead, they mostly keep talking as if their election campaign were still on. Finance Minister Yanis Varoufakis on Sunday compared Greece's international bailout to an addictive drug. "We have resembled drug addicts craving the next dose," Financial Times quoted Varoufakis as saying. "What this government is all about is ending the addiction." The finance minister's point is that Greece doesn't want the next tranche of the bailout: It would rather go "cold turkey". To EU and German officials, this will sound like a rejection of help that cost them much effort and domestic political goodwill.
Merkel is said to be avoiding a one-on-one meeting with Tsipras to give him a feeling of isolation. She is also now echoing Schaeuble's tough stand on debt relief -- although if she were a flamboyant leader in the Tsipras mold, she would probably say what Barbara Wesel, Brussels correspondent for the German international broadcaster, Deutsche Welle, wrote in a recent column:
You can believe that cheek will win out. And you can be drunk with your own power and put your hands in your pockets when you say goodbye to one of your European colleagues. But you can't continually insult the people you have to negotiate with, whether it's about national bankruptcy or Greece's exit from the EU. Angela Merkel doesn't have to accept the comparisons with Hitler and Schaeuble has nothing to do with any "Fourth Reich."
Treat Merkel as an adversary, and she will show she's a bad one to have. Cameron learned that after clashing with Merkel over the appointment of Jean-Claude Juncker as European Commission president. The British prime minister, who vocally opposed the nomination, ended up isolated and even mocked by colleagues as he took his solitary stand. His humiliation may have pushed the U.K. a few inches closer to an EU exit, but it showed the rest of the bloc's members that public grandstanding is not the best way to advance their agendas.
Another recent example of EU firmness concerns Bulgaria, a country much closer geographically and in terms of population size to Greece than the U.K. In June, 2014, Brussels told the Balkan nation to stop work on the Russian South Stream gas pipeline project because it violated certain EU rules. When the government of Bulgaria's then prime minister Plamen Oresharski refused, the bloc cut off tens of millions of regional development funds and threatened even harsher measures. The government soon fell, and Oresharski's opponent Boyko Borisov won an early election. He complied with EU demands concerning South Stream, causing Russian President Vladimir Putin to cancel the project.
Greece, of course, is an older EU member than Bulgaria, and there's more sympathy in important countries such as France and Italy for lightening its debt burden than there ever was for Putin's geopolitically-motivated gas projects. Yet there are plenty of EU members where voters are poorer than in Greece, and their leaders will probably sigh with relief if there is no debt write-off:
Merkel will not be alone if she decides to stonewall Syriza. Besides, she knows that Greek voters never gave Syriza a mandate to take the country out of the euro area or the EU itself. In fact, Tsipras explicitly promised during his campaign that this wouldn't happen.
Right now, Syriza is more popular in Greece than Oresharski's cabinet was in Bulgaria at the time of his confrontation with the EU. Yet, the party doesn't even have an outright majority in the Greek parliament. If its brashness fails to deliver results and only increases the Grexit threat, the Oresharski scenario becomes entirely plausible. Syriza's fall under such circumstances would be highly desirable for Merkel and other moderates in the EU, showing other countries that upstart populist politicians are no match for the European project's architects and that giving power to forces like Syriza or Spain's Podemos is a waste of time.
I still don't consider this the most likely outcome. For all of its members' fiery rhetoric, the Greek government was docile in the only contentious EU matter that it has had to deal with in its first days in power. Despite Syriza's opposition to sanctions on Russia, Greece last week voted to extend them by six months, as Foreign Minister Nikos Kotzias assured his EU colleagues: "We are in the mainstream; we are not the bad boy."
EU leaders, in reaching the requisite compromises on Greek debt, will probably force themselves to regard the bombastic noise from Athens as the necessary cost for Syriza not to disappoint its angry voters. More such noise, however, could make the compromise politically difficult: it would be easily framed as giving in to the "cheek" of left-wing demagogues from a small country on the outskirts of Europe. Helping Greece, in that sense, would be an ugly precedent instead of a noble act.
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