The Greeks have spoken: End austerity

Sunday, 5 July 2015, Greece held its first referendum since 1974. The Greek people were asked to express their opinion as to whether they would accept the proposals of the international lenders (i.e., the European Commission, the European Central Bank and the International Monetary Fund), which mandated further austerity measures and more structural reforms of the Greek economy.

Syriza – a grassroots coalition of various leftist groups – won the elections on 25 January 2015, with the promise to end austerity. The budget cuts implemented by former governments at the request of the international lenders resulted in serious hardship for many Greeks, and left a quarter of the workforce unemployed. After five months of fruitless negotiations the Greek government decided to put the proposals of the international lenders before the people, hoping that this might pressure the EU to offer a different and better bail-out program. The Greek Prime Minister A. Tsipras asked the people for a strong ‘No’ vote to strengthen his bargaining position vis a vis the Europeans.

The Greek people endorsed their government’s request: the final count was 38.7% ‘Yes’ and 61.3% ‘No’, with turnout reaching approximately 63%. Moreover, preliminary analyses of the result show clear signs of class voting. The ‘No’ vote has received overwhelming support in the most deprived and working class regions of the country. Conversely, affluent areas were proved to be ‘Yes’ strongholds.

The referendum divided political and social actors, as well as the people, with mass rallies held by both sides as they tried to convince the people of their position on the referendum. The Eurozone officials, as well as ‘Yes’ supporters in Greece, argued that the referendum amounted to a vote on Greece’s place in the Eurozone. This was fiercely denied by the Greek government, who saw it as a demand for an end to austerity, a recognition of the humanitarian crisis in Greece, and a call for help to finance development. It was also a cry for democracy in the EU.

‘Yes’ was supported by the opposition parties, including the right-wing New Democracy party (ND), the social democrats (PASOK), and the centre-right party (To Potami). It was also endorsed by all privately owned media and all employers’ associations. ‘No’ was supported by the two governing parties, left-wing Syriza and the nationalist Independent Greeks, as well as the neo-Nazi Golden Dawn. The Communist Party (KKE) called on the people to say ‘No’ to both the government proposals and the international lenders.

All banks were closed the entire week prior to the referendum, and capital controls were also in place (Greeks were allowed to withdraw only 60 euros per day from ATMs). All signs indicated that it would be a very tight race (as also shown in the polls). It was also anticipated that the Greek people would be frightened by the messages of EU political leaders and heads of government who had lined up to warn the Greeks that a ‘No’ vote would be a vote to leave the Euro. However, Greek voters delivered a defiant response to Europe. Indeed, as BBC’s chief correspondent Gavin Hewitt remarked, many voters seemed to revel in their resistance.

The Greek referendum is now in the past. Yet, as is always the case when the people speak, the real question is what they have actually said– given the various interpretations and biases of political actors, analysts and commentators. Regardless of the many interpretations, however, I see two groups of issues that stand out. The first relates to a possible politicization of the EU in Greece and also beyond. The second relates to internal political developments in Greece.

With regard to the first set of issues, the referendum might signal a change in the nature of the EU-Greece relationship. The EU process has always been elite driven, and the people of Greece had never been called to express their opinion on European issues. Their direct involvement for a first time signals a precedent that cannot be easily ignored in the future. By the same token, European issues have been of minor and secondary importance in Greek politics thus far. This was subserved by the fact that Greek public opinion was overwhelmingly and wholeheartedly in favour of EU participation. However, in recent years there have been signs that this attitude is changing. A European cleavage might be in the making; this may also emerge in other countries as well (e.g., Spain).

After five years of recession and welfare cuts, many ordinary Greeks feel bitter; they see how much they have suffered, while Europe’s business elite was able to recover quickly from the financial crisis. Therefore, I believe that any politicization of the EU is likely to be structured along three issues or some combination of the three. Thus, in the European Union of today we can note: (i) the continual decrease in state sovereignty, which means that national governments are left with few resources and little real power to combat the crisis; (ii) the increasing democratic deficit, as revealed/confirmed by recent Eurobarometers showing that not only do EU institutions lack legitimacy, but more importantly, they seem unwilling to hear the different voices articulated by European peoples; (iii) the belief that EU policies do not fairly address the growing social and economic inequalities and the rising levels of unemployment, especially under circumstances of economic crisis. The EU is increasingly viewed as part of the problem and not part of the solution. At the same time, the EU leadership is also faced with important decisions regarding the future of the European project, and the Eurozone in particular.

With regard to the second set of issues, i.e., Greek internal politics, the referendum outcome has already prompted important changes within the largest party of the opposition, ND, with its leader A. Samaras resigning. The opposition seems to lack reliable leadership to face Tsipras, since the Greeks blame them for bringing their country to the dire state it is in today. The KKE will probably have a very difficult time explaining its position of refusing to choose either alternative, and most importantly, its decision to not vote ‘No’ given their long-standing opposition to the EU.

However, it is not only the EU leadership and the Greek opposition that face critical days ahead. Tsipras and Syriza must use all their abilities and creativity to reconcile what seems to be an impossible mission. They need to respond in a way that does not disappoint their supporters, they must keep the party’s internal opposition at bay, and they must also strike a deal with the international lenders. Having declared in all possible ways that they only see Greece’s future in the EU and the Eurozone, and having won the referendum demanding an end to austerity, Tsipras and Syriza must now find a solution for the pressing financial needs of the state and at the same time be convincing enough that the new agreement is compatible with their leftist background and their promises.

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