The humiliating offer presented by Eurozone finance ministers to the Greek government is designed to bring down Syriza – discussed by Dimitri Lascaris and Michalis Spourdalakis, interviewed by Paul Jay
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to the Real News Network. I’m Paul Jay.
The words being used as the negotiations between the European finance ministers and leaders of Europe’s countries involved in the Eurozone and the Greek government are words that are usually used around times of war. Humiliation. Dignity. Well, what will Greece emerge with? It wasn’t very long ago, just a few days ago, there was a referendum, and the referendum was about the dignity of Greece. Would people vote no to an agreement they thought was humiliating.
Well, they did vote no. And now the negotiations that are taking place, in spite of that referendum, the Greek government offered up a set of proposals that wasn’t very far from those that were rejected. But Germany, it seems, is driving through a proposal that even goes further than everything presented before.
So now joining us to talk about all of this is first of all, from London, Ontario, Dimitri Lascaris. Dimitri is a partner with the Canadian law firm of Siskinds, where he heads the firm’s securities class actions practice. He’s also a board member of the Real News. And joining us from Athens is Michalis Spourdalakis. He’s the dean of the School of Economics and Politics at the University of Athens.
Dimitri, could you just first of all give us a quick summation of where things are at now? Apparently meetings are even still going on. And we’re recording this after midnight in Europe, but apparently the negotiations are still going on. And so as best as we know, where are things at?
DIMITRI LASCARIS, SECURITIES CLASS ACTIONS LAWYER IN CANADA: My understanding is that Greece has been given, the Greek government has been given an option of a temporary exit from the Eurozone, which I understand would be envisioned to last for approximately five years. I understand that that would be coupled with some amount of humanitarian assistance, and that Greece would have the opportunity to return to the Eurozone potentially in five years’ time. It would have to reapply, and undoubtedly go through some sort of rigorous screening mechanism.
The other option for it remaining in is that it adopted a number of measures pretty much immediately. Seven would have to be implemented, seven straight away. One is the streamlining of that, the broadening of the tax base. The sustainability of the pension system, the adoption of a code of civil procedure. The safeguarding of legal independence for the statistics office in Greece, the full implementation of automatic spending cuts, and satisfaction of bank recovery and resolution directives.
All of this is obviously quite technical, but that is a–I could tell you that as a lawyer who is fairly familiar with the legislative process, to have to address those subjects within the space of three days is an impossible task, in my view. I mean, it cannot be done in a thorough, intelligent, and responsible manner in so short a period of time.
In addition to that, I understand that there would have to be some initiation of a legislative process towards another five points. One is the privatization of the electricity transmission grid, decisive action on not nonperforming loans of banks, ensuring the independence of the privatization body, the depoliticization of the Greek administration–that in and of itself strikes me as a herculean, time-consuming task. And the return of officials from the Troika to Athens, something that has been politically toxic to this government, and with good reason.
When I look at the–and there’s been discussion also about Greece placing $50 billion of assets in a trust, which it has emerged under the German proposal would be controlled by a corporation that has links to Wolfgang Schauble.
JAY: He’s actually, he’s the actual chair of the board, if I understand it correctly, of the company that’s the holding company of the institution.
LASCARIS: Right. That’s my understanding as well.
JAY: And Michalis, this $50 billion of Greek valuable assets that are supposed to be put into this trust–I mean, it’s such–this is what everybody is calling humiliating. Every journalist reporting on this is using this word, humiliating. The $50 billion fund seems to be designed so that these talks have to fail. What do you make of this, Michalis?
MICHALIS SPOURDALAKIS, DEAN, SCHOOL OF ECONOMICS AND POLITICS, UNIV. OF ATHENS: Well, I remember having given a public talk about the, almost three years ago, with one of today’s cabinet ministers. And he, Giorgos Stathakis, and he was telling back then that if we were to privatize public property, these wouldn’t exceed eight or probably $10 billion Euros. Now the task of raising $50 billion Euros by selling public property, it’s a task that cannot be achieved, and it’s part of the humiliation.
But part of the humiliation is the legal processes that they’re proposing. And they’re proposing to Syriza to follow the path of the previous governments, where the habit of the previous governments is to violate or come near to violation of our constitutional regulations. I mean, how on earth you can pass in a week six major legislations, you know, it’s impossible. You can do it only if you actually bypass any parliamentary procedure and any kind of parliamentary dialog and exchange. It’s part of the plan to humiliate the Greek government.
LASCARIS: And I just want to–you know, Michael’s talking about the constitutional aspects, obviously extremely important in any sovereign nation. I’m talking about the practical aspects. There are those–it’s a two-edged sword here. I mean, the–merely the practical implications of trying to pass this vast body of legislation within the space of several days is to me in and of itself a clear message that the creditors do not want a deal with Greece. They cannot possibly believe that this can be done in a remotely responsible manner in a democracy in so short a period of time. And that’s exclusive of those important constitutional considerations that Michael identified.
JAY: Well, Tsipras has not walked. At least, not as of the time of us doing this interview. Apparently he’s raised four objections to the, what’s been presented to him, one of which of course is jettison the $50 billion of assets. No IMF involvement. Now, why is that so important that he wants no IMF involvement?
LASCARIS: I mean, that’s an interesting question. From my perspective the creditors have all been equally, with possible exception of some of the Eurozone governments, equally ruthless and insistent and unreasonable in their dealings with the Greek government. I think there may be a perception, Michael may be able to speak to this better than I could, within Greece that the IMF is perhaps more an instrument of American imperialism than the other institutions. For me, for my perspective, they’re all equally as noxious.
JAY: Michaelis, why is he making such an issue of no IMF involvement?
SPOURDALAKIS: Well, I think one possible answer to this is that Tsipras’ government would like to settle the crisis, which is not only a Greek crisis. It’s a crisis in the Eurozone. And to try to confine it within the European context, and not have IMF’s involvement in it. As a result of that, I just, five minutes ago, IMF–or the some information, some reports that the IMF is calling for Tsipras’ resignation.
JAY: A lot of people are saying that’s what this whole proposal is about, is the resignation of the Syriza government. The hashtag that’s trending right now, I think it just went up a few hours ago, which is #ThisIsACoup. That seems–many people think that is what this is all about, is to bring down Syriza.
SPOURDALAKIS: Yeah. I think this is more than clear for many months now, in fact. It seems to me that the European leadership does not want any government in our continent that has some differences or it has a different orientation from what the leaders of the European Union say, namely the Germans and the Dutch and whoever else agrees with them.
So they want to undermine the government. The original strategy was left-wing break. In other words, give or allow Syriza to enter the governmental power, and [we’re going to touch] off the obstacles to them that at the end of the day they won’t be able to survive, and they will withdraw. They’ve been trying within the country, they’ve been doing that by using the [deep state.] They’ve been doing, they’ve been trying to do that through using the media. And they’ve been doing this by trying to split Syriza itself.
And so there were some frictions, difference of opinion I would say, within Syriza around the memorandum. There were some difference of opinion around the, around the memorandum. The referendum, I’m sorry, within Syriza. But the result of the memorandum put an end to this difference of opinion. And the question after this huge victory, given that the war waged by the media and the–having the banks closed, that the Greek people overwhelmingly vote against the austerity, the continuation of austerity, why the government proposed a very similar, a very similar proposal to the, to our creditors.
JAY: So what’s the answer to that? Why?
SPOURDALAKIS: The answer is that the government probably is very skeptical because it seems that the Greek society and the government is not ready to go all the way and have a rupture with the Eurozone.
JAY: What do you think of the theory a lot of people are talking about that Tsipras and Varoufakis actually were hoping and expecting the yes vote to win, and they didn’t, they were caught when the no vote won?
SPOURDALAKIS: No. I don’t–I don’t, I don’t think this is true. Probably a few people in and around Syriza had that hope. But the, you can’t say, it’s unfair to say that for either Varoufakis or for Tsipras. They were very strong with the no vote.
But no one was expecting the extent of that, of that victory. The most optimistic prediction was at the time having the 55-45. Now you have almost a 62 percent. Again, I have to underline this is a result having the banks closed and having huge lineups to get 50 or 60 Euros a day, standing in front of ATMs and having four, five major channels terrorizing and engaging into terrorizing–.
JAY: But do you think that political moment, the political capital you could say, that came from that vote, that moment, was kind of wasted with a question that kind of left everything up in the air? Because I mean, the question was, do you reject that specific proposal? But there was no then what.
SPOURDALAKIS: Well, let’s think of the event after the referendum. The first thing that Tsipras did is they called a meeting of the leaders of all parties and try from a hegemonic point of view, having won the referendum, to sign a statement saying that there is going to be a just agreement, an agreement that would deal with the debt, and guarantees some money for investment and development for the country. And then he went to the European parliament. He put forward the proposal, he went to the European parliament.
Now there, if one likes to analyze the semantics, and the, the politics of that meeting which lasted five or six hours, it’s quite interesting. Because Tsipras had a very warm welcome from a good part of the social–of the European socialist party. The majority of the Greens. And of course, the party of the European, of the European left. And of course he got a very hostile welcome, if I can use that expression, by everybody else. And he was very good in the exchange between him and the leaders of, or the spokesmen of all the wings of the European parliament.
Now, if I was Schauble or Merkel, who would like to have one single voice in the European political scene, a voice that accept the and dances to the rhythm of the markets, and I don’t want any sidetracks by anybody, I would worry about the appeal that Tsipras himself has on the European states. We are about three months ago or so away from the Spanish election, and the Irish election is not all that far away. So that probably contributed to make the line of Schauble and the rest of the people there–.
JAY: That’s the German finance minister.
SPOURDALAKIS: Finance minister. The [Baltic] countries and the Dutch to be more hostile against the Greek proposal, which was already a further concession which maybe was moving away from capitalizing on this victory, but using that sort of, abandoning the momentum that this victory was giving to the Greek people.
JAY: Dimitri, a lot of people are talking about this on Twitter, and emails flying back and forth. Was this proposal that came from the Greek government essentially a capitulation after the results of the referendum? And is what’s going on now likely to be even a further capitulation. But did Tsipras and the Syriza government have any choice?
LASCARIS: They have a choice. It’s not a particularly palatable choice, the choice being a withdrawal from the Eurozone. And it’s not palatable for two reasons. First being that that requires an immense amount of preparation. And even in the best of circumstances that is a process that requires many months to be executed competently in a way that doesn’t cause significant damage to the economy. And all the reports that I’ve seen and all the indications that I’ve seen is that Syriza, the leadership, not the left platform but the leadership, is completely invested in maintaining, remaining with the Eurozone. So much so that no meaningful, practical preparations have been made for the possibility of a Grexit. That increases the potential harm to the economy and the people of Greece should that avenue be pursued.
The other is the political obstacle to a Grexit. And Michael touched upon this. There–Michael mentioned that the Greek people don’t seem to be ready for this. From my perspective, that’s not so clear. And I say that for several reasons. First of all, the polls which are frequently cited as evidence the Greek people don’t want to leave the Eurozone, many of them if not almost all of them have been conducted by media organizations or commissioned by media organizations in Greece that are controlled by the oligarchy. And the polling in Greece has performed very poorly.
I think the referendum is an excellent example of this. Michael indicated that the most optimistic prediction from a poll vis-a-vis the no vote was a ten point margin of victory. The margin of victory was 24 points at the end of the day. That’s a huge discrepancy, given the number of polls that were performed. As I say, that was the one that predicted the largest margin of victory. Others showed that there was going to be a vote–the difference of the vote was going to be two or three percentage points. Some were even predicting a yes victory. And yet you had this massive discrepancy between the no vote and the yes vote. How could they all have gotten it that wrong?
You have in the context of a Grexit polls from external organizations or independent organizations like Gallup in 2014 in December, which showed a slight majority wanting to leave the Eurozone or preferring the drachma. There was another in March of this year by an organization, an independent polling organization called Bridging Europe, which showed 53 percent wanted to leave the Eurozone. So there’s an issue about whether these polls that show a desire to remain within the Eurozone to be accurate and reliable.
But there’s also the question of what happened in the referendum. One after another the very people, including those who are now presenting themselves as champions of Greece, the prime minister of Italy, the president of France. They came forward the day after the referendum was announced and stated clearly that a vote against the ultimatum of the Troika was a vote for an exit from the Eurozone. And of course, Prime Minister Tsipras disagreed. But who–I think many Greek voters understood that the leaders of the Troika held all the cards, and that their threat should be taken seriously. They haven’t hesitated to punish the Greek population all these five years. So I think the threat was probably taken quite seriously by a number of people who voted oxhi.
And they nonetheless voted oxhi, and so one could interpret because of the very clear message and threat that was directed at the Greek electorate in the runup to the referendum, no one could interpret that vote as being a vote supportive of a Grexit.
And the last thing I’ll say is that the right question hasn’t been asked of the Greek electorate in these polls. They shouldn’t simply be asked whether they want to remain in the Eurozone. Of course if the Eurozone is a virtuous Eurozone which is progressive and has a strong social welfare component, and where inequalities are not grotesque, as they are becoming, then of course people may very much desire to be in the Eurozone. The question rather is whether they prefer to remain in the Eurozone at any cost. And that question, as far as I know, has not been put to them. And if it were it would be very interesting to see what their answer would be.
JAY: Michalis, what do you think?
SPOURDALAKIS: Yeah. One short comment. When I mentioned that the Greek population is not ready, I didn’t mean the sentiment of the Greek population [of], I didn’t know the polls taken that they give, a slight majority at least of the Greek population that would like to leave the Eurozone. I can say that after the experience of the last ten days, the Greek population is ready, or is willing to leave the Eurozone. Because under the circumstances there is not going to be any future for their society.
I [fear], however, that the Greeks are not ready in terms of the technical aspect of this, if there is a technical aspect. I don’t know if there is a plan on the part of the authorities. And even if there is a plan from the government, I don’t think that we do have the civil servants or we have the capacity of implementing such a plan, which is going to be, as we all know, very very difficult to implement.
But at that point, having the latest proposal from Shauble and the others that the government is asked actually to roll back every legislation that they put forward in the last six months.
JAY: Yeah, this–I understand it even means, for example, some of the cleaners and teachers that were re-hired are going to have to be laid off again.
SPOURDALAKIS: Yes. And even close again the national broadcasting corporation, or–.
JAY: Say that again. They want them to close the public broadcaster.
SPOURDALAKIS: To shut it down. You know.
JAY: Which would give the private media the complete monopoly.
SPOURDALAKIS: You know, another kind of monopoly. And what else, and even to roll back all the tax breaks that were given to the, to individuals or to small businesses, and even roll back some humanitarian measures that they [inaud.]
This is a coup, in fact, because they want to humiliate the government and bring the government down. That’s, that’s the whole, that’s the whole thing.
JAY: Michalis, when we were doing interviews and discussing all this even before Syriza actually won, when the polls were showing Syriza was likely to win. We were saying things on the Real News like be careful what you wish for. And I don’t understand–one, I never personally agreed with them running without saying yes, we want to stay in the Eurozone but we will prepare a plan B. and I don’t understand that, even if they didn’t want to say that in the election why they didn’t prepare a plan B. This seems rather predictable that the Germans were not going to go along with this, and if there was any weakness on Syriza’s part they would pummel them, which is what they’re doing.
SPOURDALAKIS: Yeah. Well, there is a base to criticize Syriza. And the base is not that they–they made one capital mistake. The major mistake is that they thought that Europe and European Union still operate on rational principles. They thought that okay, we will go there–so what happened, they thought that they would go there, would state their argument, would be well documented and they will show that the previous state of the program doesn’t work. And they were, they thought that they can convince the other, the other parties.
But that didn’t work like that. They undermined the fact that the European Union’s leadership and all the creditors, they do not want Syriza and Tsipras on the political map of Europe and the dynamic that this presence brings. Also what was underestimated by Syriza’s part is that the, they thought that the European appreciate democratic reactions or democratic criticism to the economics and social policies.
JAY: That seems a little naiive.
SPOURDALAKIS: Well, I, you know, you said it. It was very, very naiive. Because the–Syriza coming into power was of course partially the result of the crisis and the result of the policies followed to confront the, to deal with the crisis. But it was a democratic, a democratic response.
In almost every other country in Europe, with exception of course of Spain and Ireland, what we had political response is that they are changing the maps of individual countries. But these political responses were at best right-wing populist Euroskeptics, radical right, and even neo-Nazi responses. It seems that the European leadership can tolerate these political developments but does not tolerate a democratic response to the crisis. Mind you, this democratic response comes from a radical left-wing political party.
And it was actually this, really naiive that way, that the European leadership would understand that. That’s why it seems that there is not such a plan for the rupture with the European, with the Eurozone.
A further point is that there is, in the European agreements, there is no provision for leaving the Eurozone. Even if a country wants to leave the Eurozone this can–it’s not possible. But again, another naiivete of the government is that the agreements matter. No. I’m sorry, but the agreements in the European Union do not matter. Procedures do not matter. Power, political, naked political and economic power seems that matters.
JAY: Well, it seems to me anyone looks at the 20th century should know that. Dimitri, just a final word to you. I know you were elated when Syriza won and then you were increasingly concerned. What do you think comes next?
LASCARIS: Well, you know, I fear for the worst. I don’t really get a sense from the messages that are coming out of the bloc that is led by Germany that there is going to be a proposal put on the table that can be accepted by the government that will not precipitate a collapse in the government if it were to be accepted. And by the same token as I indicated, there’s real doubt as to whether the government is remotely prepared for the eventuality of the collapse of the financial system and the issuance, the seizing of the banks and the issuance of a parallel currency.
I think most likely what we’re going to see is a disorderly Grexit at this point. And I’m hopeful that other nations, including the United States but by no means limited to the United States, will come forward with humanitarian and technical assistance to ease the pain of the Greek population.
JAY: It seems to me, what Michalis is saying seems logical, which is the objective here is the fall of Syriza and if they can get some, if Syriza does fall, and then you put in some technocrats backed by the military but essentially a technocratic government that does exactly what the finance ministers of Europe and the Troika want, then they do the austerity on steroids. And Syriza, I assume, splits in various ways.
LASCARIS: That may happen. But eventually–I actually don’t think that’s, I don’t think that the, that all of that can occur quickly enough to prevent a collapse of the financial system, first of all. But even if it can, this program will make it even–it will accelerate the default on Greek debt. It is such a draconian, contractionary set of policies that eventually Greece will default on all of its debt, not merely on the IMF debt, and that will precipitate an exit from the Eurozone.
So it may delay the exit, but the exit will occur. And ultimately the will of the Greek people will be respected, although people may suffer enormously in the interim.
JAY: Michalis, you wanted to say one final thing.
SPOURDALAKIS: There is still, it is the turn of our leadership, the negotiations are still going on all night tonight. There is still a last chance. And the last chance to prevent all this is to say no and leave the negotiation table. And I’m pretty sure the support of the Greek people this time is going to be far more than 60 percent.
LASCARIS: I agree with that. Absolutely. Absolutely.
JAY: All right, gentlemen. Thank you very much for joining us, and we’ll be following this all tomorrow, as well.
And thank you for joining us on the Real News Network.
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