Greece: Do elections change anything?

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BERLIN, Germany — Two weeks since the coalition of the radical-left Syriza party won the elections in Greece, freshly assigned Greek Finance Minister Yanis Varoufakis completed his tour of the European capitals in Berlin last Thursday, Feb 5. In the German capital, Varoufakis’ meeting with his German counterpart, Wolfgang Schäuble, in a call for a new deal in Greece’s debt provided no surprises; they both agreed that they disagree.

The mood seemed awkward between the two diplomats from the beginning. The German federal finance minister spoke of European integration and its rules. He also argued that there was no place for renegotiations in the financial plan of Greece. However, he offered to send German tax officials to the debt-wrecked nation, following up on the Greek government’s fight against tax avoidance.

Schäuble however, avoided expressing his view following up on a question about the Siemens’ case involving German coups in corruption scandals that were revealed by Greek officials in 2007 and are on hold. This instance cost the Greek economy an estimated 2 billion euros.

Varoufakis, on the other hand, asked for time. He claimed that his side has proposals for a new reformed plan of repaying Greece’s foreign debt without intense austerity. He also made assurances that Europe should expect nothing but a “frenzy of reasonableness.”

Varoufakis also stressed the humanitarian effects of hardcore austerity forced by Greece’s creditors with reference to the existence of a Nazi movement in the country. This is mirrored in the presence of the far-right Golden Dawn, which is the third largest party in the Greek parliament. The Greek finance minister did not mention anything about a new fiscal “haircut,” whilst he pledged that there is a reachable solution that will give an end to the “Greek saga.”

The outcomes of this meeting brought no surprises as Greek debt has been top priority in the European agenda since the Syriza party won the recent electoral rally in Greece.

The night before Varoufaki’s visit, the European Central Bank announced that it will no longer accept Greek government bonds as collateral for lending money to commercial banks. This means that the liquidity for Greek banks will be limited to the Emergency Liquidity Assistance with a higher interest rate of 1.55 percent, compared to 0.05 percent on regular ECB financing.

It is true that the situation in Greece has been intense the last four years since the financial recession stormed, with hardcore austerity and rising levels of both poverty and unemployment. The impact was translated clearly into ballot results of the recent Greek Elections. Greek voters seemed to be largely affected by the impact of the memorandums signed by the pro-european former government, which brought further economical and social depression.

Syriza used to be a eurosceptic party, and it seems ready to play the wild card of the deactivation of Eurozone membership for Greece if things don’t work out. They claimed so in both campaign trails they took part in during the past ten months in the European Parliament and National Elections.

The question that arose in this instance is not what Syriza’s intentions are if things don’t go right, but what the creditors of Greece would decide when faced with a more aggressive negotiator, comparing to their successors. The topic is expected to be discussed in the Eurozone finance ministers meeting in Brussels next Wednesday, Feb. 11.

Analysis by Konstantinos Koulocheris

1 thought on “Greece: Do elections change anything?”

  1. Writer’s comment;

    Considering the conditions of life in ‪#‎Greece‬ (see poverty, unemployment rates, austerity and lack of growth), critics on the European procedures claim that the nation itself appears to be more like what a member of the ‪#‎Soviet‬ Union was rather than a ‪#‎European‬ one.

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