So, this is basically the same deal as they refused last time, just a little worse. There is some talk that American pressure has made Merkel decide to consider a debt writedown, which they will do by extending the duration of some of the bonds. It is unclear if this will really happen.
If this deal, or some form of it even with mild debt reduction, is accepted, Greece will remain under austerity and in depression.
Syriza will say they had no mandate to leave the Euro, and it’s true they never asked for one. But they did have a mandate to not accept this bad a deal, I believe.
More to the point, they did have a mandate to end austerity, and they will have failed.
I think part of this is due to clearly delusional thinking: They really did believe that Europe would let them cut a deal which wasn’t harsh austerity.
Much is incompetence: They did not make the necessary preparations for Grexit. They had no BATNA–best alternative to a negotiated agreement. As such, they basically had to accept whatever Europe offered. If it wasn’t for American intervention, I’m not sure they’d have been able to get even what they’ll get after the referendum. (Americans intervened because a Grexit could have been the first move in Greece spiraling towards the Russian orbit.)
The rest is simple spinelessness. Cowardice. Yeah, I’m just going to say it. This is a cave.
This is a mistake politically as well. Having failed to end austerity, Syriza will not be the next government of Greece. If they had gone to Grexit and the economy had recovered by the next election, they’d be golden and probably a majority party for a generation.
I wrote what I think the consequences of Syriza blinking (I consider this them blinking) yesterday.
Please read that post. It is an important one. This failure will have huge consequences for the future of Greece, Europe, and, indeed, the world.
Enjoy your weekend, and listen to some 80s ballads.
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Peter
With respect, leaving aside ideological analyses, your posts seem deaf to the political dynamics and why so many Greeks and other Europeans fear the break-up of the Eurozone, especially a forced, angry one, as existentially traumatic and very dangerous. To laud Syriza one week for seeking a popular democratic mandate and then call them cowards the next for not forcing a Grexit when polls show an overwhelming majority of Greeks don’t want that is intellectually pretty…umm… high-handed.
Stirling Newberry
S figured out who was against them, and made them pay. it is not enough, and I expect they will lose the elections.
Ian Welsh
Syriza has won two mandates to end austerity. I’ve believed all along that the mandate to end austerity is more important than the “without leaving the Euro” part. They’ve made more than an honest effort to end austerity without leaving the Euro. I don’t see that the Euro is more important than all the suffering austerity causes.
If they don’t, someone else will. You, Peter, will not be a fan of those people.
Peter
I don’t see that the Euro is more important than all the suffering austerity causes.
Neither do I. But they apparently do and they’re there and I’m not.
mike
It’s very disappointing how you insist that your belief that “without leaving the euro” is lower in priority to the other conflicting goals the Greeks gave their leadership. I agree completely that I believe that leaving is the better idea, but I can’t prove it and neither can you. Only time will tell what the Greeks and everyone else gets from whatever comes out of this. As Billmon has been saying, exposing the other side for what it is and getting any kind of reworking of the debt relief actually just might be the keys in the long run for what plays out. That the Greeks don’t want history to pin the destruction of the EU and the euro on them is indeed arguable, but in the “are fritos better with diet Dr. Pepper than fun-yuns?” way, not the “will fire burn your hand off?” way. I pose the question I posed a few days back. How are we who disagree with the decisions different than the troglodytes the Greeks have had to deal with regarding the obligations of elected officials toward their constituents if we insist that, once elected, they should ignore the wishes, however conflicting, of those who elected them? How can we continue to lament “they say one thing, then do another when they get elected” if that’s what we insist that they do when we BELIEVE we have better ways? We should just admit that we’re not democratic either, and I do think we will come to that as the future you usually are prescient about unwinds, and just stop pretending that we aren’t the mirror images of those we condemn in this. It’s going to come down to power and who’s got the most of it and/or uses it best, yes, but to condemn as quislings as others have done, to call out elected officials who actually have caused far more to happen than their predecessors when they have done better than any of us would have at reconciling the conflicting goals their voters gave them, as do the democracy we claim to support, is at least high-handed. (And please don’t cut off your important comment sections now just because you get this kind of feedback like Yves Smith has done. Your thoughts, even when we disagree, are highly valued.)
mike
This says it better than I obviously just did.
Via Billmon: https://www.byline.com/column/11/article/155
Robert Dudek
Leadership requires being a leader. It is true that Greeks elected Syriza to end austerity within the Eurozone, but after three weeks it should have been apparent that this was impossible. That is precisely the point that Tsipras should have gone to the people with a referendum and said: because the Troika demand it, austerity must continue if we are to stay in the Eurozone. It is now your choice – austerity and the Euro, or Euro exit and proper fiscal policies and eventual prosperity.
Jeff Wegerson
I said at the announcement of a referendum that wording was critical. One the one hand it is critical in getting a “winning” referendum and on the other it is critical in getting the mandate one may desire or need. The wording Syriza used was the narrow one of “austerity” yes/no and it appeared to be wording designed to “win” rather than define an exact mandate, specifically the Grexit mandate.
I get that we call for democracy. I get that asking for a mandate to say no to austerity and then turning around and trying to use that mandate as a mandate to Grexit is on the face of it undemocratic. I get that in theory to be democratic we should ask specifically about Grexit.
But the other half of democracy is an informed electorate. Effectively informing an electorate that something that sounds bad, a weak currency, can be good is difficult. It is especially difficult when there exists a strong media presence that is willing to be dishonest. By that I mean, of course, the neo-liberal corporate media.
So in that un-level playing field I think we (a “the left”) do not do a disservice to our people when we use a referendum that is worded one way to effect changes within our understanding of the spirit but not of the letter of the referendum. Meaning that Syriza could honestly and ingenuously do a Grexit off the referendum they won. In my opinion.
EmilianoZ
We shouldn’t be overly pessimistic about what happened. I see it as a first step towards Grexit. The Greek people are deeply wedded to the idea of Europe. A Grexit could not happen at this stage. But hopefully the recent events will start detaching them progressively from an idea they love. Now the disgust with Europe will sink in gradually.
There was no preparation for a Grexit. In the middle of the negotiations the ECB put a gun to their heads. Syriza did what they had to do to save Greece. You must live to fight another day. Hopefully the Greek people will understand that. I dont think the Greeks are too unhappy with Syriza. What they witnessed was a real good bloody fight. That alone has restored some measure of dignity. That explains the wild popularity of Varoufakis. He was never a supine supplicant like some pundits would have liked him to be.
Now they must make preparations for a Grexit within 5 years. I believe they have already started with the forging of ties with Russia. A BRICS payment system could be in place by then. They should be able to do it. They have the best programmers with India.
For sure the euro is dead. Germany has shown her real face here for all to see, ready to punish 10 million people because Varoufakis and Tsipras did not show Frau Merkel and Herr Schaubbie proper deference. France might be the black swan here. If there is still some shreds of pride in them they will want to leave on their own terms while they still can. The French are already inclined towards Marine Le Pen for unpalatable reasons. Additionally le Front National has good relations with Russia.