Greek experience

Issue section: 

Joseph Choonara’s comment that “Syriza could have stuck to its pledges in the hope that European finance ministers would cave in” (In perspective, March SR) might actually understate the strength of Syriza’s negotiating hand.

Greek reluctance to leave the euro is still widespread, but surely dwarfed by the dread experienced by German chancellor Angela Merkel and the banking Troika, for the reasons Joseph outlines.

It is an open secret that Greece can never pay off its national debt. But writing it off by negotiation would be as disastrous for the eurozone as unilateral refusal to pay (disorderly default).

Syriza only just managed to cobble together a €770 million repayment to the IMF in May. It now faces rollovers totalling €25 billion before the year end, including €7 billion in June and again in July, an impossible burden at any level of austerity.

So why such intransigence from Merkel and the bankers? Because they don’t know what else to do. They must realise that austerity can never generate a Greek budget surplus. Oblivious to the suffering of ordinary Greeks, the bankers simply play for time in the hope that something will turn up.

At the time of writing, the Syriza leadership seems set on compromise. Yet the drachma could be its trump card. Simply announcing a period of dual euro/drachma would pose neoliberalism with an enormous challenge. The Troika might decide that “quantitatively-easing” the drachma back into existence and wiping the euro debt was their least worst option, and less painful for Greeks.