After a series of informal bilateral meetings, the feverous negotiations about the Greek debt at yesterday’s informal Eurogroup were not fruitful. To the surprise and beguilement of all Eurogroup members Yannis Varoufakis, the Greek Minister of Finance, in the end refused to sign a common statement despite the fact that the Deputy Prime Minister Yannis Dragasakis had already agreed on.
This is not a good development for the country. It harms the already compromised reputation of Greece, compromises trust among its partners and reduces the potential of an agreement. The Greek PM Alexis Tsipras discredited his Ministers both economic intellectuals and as negotiators. He stopped Varoufakis from singing the statement after many of the Finance Minsters, including Schauble himself, had left the room hoping that a common ground was reached and that the road towards a commonly acceptable solution was paved.
But perhaps Alexis Tsipras is not as amateur as he seems to be. Since he resumed the premiership of the country he has found himself in between clashing rocks. On one hand he is under pressure to negotiate a compromise with Greece’s uneasy EU partners and to rescue the country from a potential default. On the other hand he has to deal with the opposition from within Syriza that pushes for a harsher stance towards the EU. This comes mainly from the Left Platform group that controls 30% of the seats of Syriza’s central committee and is headed by Panayotis Lafazanis, currently Minister of Productive Reconstruction Environment and Energy. In many instances prior to the elections, the Left Platform and Lafazanis expressed anti-Euro/pro-drachma statements.
Tsipras is the expressor of the Left anti-austerity movement in Europe which hopes for a domino effect and the rise of the left in the rest of the continent. On 31 January, only 6 days after the Greek general elections, protesters at a massive anti-austerity rally in Madrid, held Greek flags. In the same rally the leader of the Spanish left-wing party Podemos, Pablo Iglesias Turrión started his speech in Greek saying that ‘a wind of democratic change is blowing all over Europe’.
Nevertheless, the negotiating position of Greece may not be as strong as the government and left-wing parties across Europe want it to be. The majority of Greeks want the country to stay into the Eurozone. Despite the harsh austerity and its negative social impact, the economy has been through the worse with the GDP being on the rise for three consecutive quarters. A potential exit from the Eurozone not only would be against the public will, but it would also push the country back to recession with Syriza, and Tsipras personally, being held accountable for.
At the same time there is no unity with the rest of the debt-ridden countries. Although a Grexit would be disastrous for their economies, an open support for Syriza would result to indirectly supporting their left-wing opponents domestically. Moreover, their economies are in a better shape than the Greek one. Portugal recently announced that it would pay in advance 14 billion of its IMF loan.
Tsipras will have to enter into serious discussions with the EU and the IMF. In order for this to happen, he will have to make a difficult and painful choice between the country’s future in the Eurozone and the pure anti-establishment, anti-troika stance that is expressed by the far-left echelons of his party. Either choice will have historical implications for the country and for the EU.