The agreement reached between Greece and its international creditors at the Eurosummit following a weekend of tense negotiations saw Tsipras reluctantly agree to a basis for negotiations on a third memorandum for his debt stricken country that looks to be just as harsh in austerity, if not more so, than the two bailout agreements that came before it.
SYRIZA rose to power on promises to negotiate with creditors for a better deal, with the –some would say noble, some would say naïve – belief that democracy still mattered above all in this European Union of ours, and in the project of a common currency. That belief has now been revealed as naïve, particularly following the referendum, which everyone repeatedly professed respect for the outcome of, whilst completely denying the legitimacy or possibility of any other path than a recipe of harsh austerity, mandated and overseen by Brussels. These events may have fundamentally changed how the European Union is viewed and what its raison d'être is, but what will they mean for Greece?
In the short term, Tsipras has lost his governing majority as the party splits into those who do not want to continue down a political path that they are convinced will condemn the country to debt peonage without end, versus those that see themselves as the pragmatists, who don’t see a viable alternative. Both factions of course have a point.
The country will likely face elections in autumn, although the only end that this will serve as far as anyone can see is to elect those who are willing to push the creditors memorandum through the legislative system, for if the outcome of the last few weeks has taught us anything, it is that there is no real policy choice in dealing with the economic crisis if Greece is to stay in the Euro. Which as yet is still what the majority of Greeks seem to want. If a third bailout package is negotiated, signed and put into practise this might still change though, as the humanitarian crisis that has quietly been eating away at the most vulnerable of society these past 5 years continues to accelerate.
There is hope that a new political class in Greece, predominantly currently represented by SYRIZA can at least implement both the ‘good’ and the ‘bad’ of the memorandum – tackle political cronyism and take on Greece’s by now infamous oligarchs, as well as implement effective tax collection measures, etc., but such reforms, necessary as they are, will not have an immediate effect on the humanitarian crisis, nor help the most vulnerable. Tsipras has vowed to seek to spread the burden of austerity across all of society, rather than it falling predominantly on the shoulders of the poorest as has too often been the case in the past, but his ability to make such decisions is likely to be severely restrained by those that hold the purse strings.
What is for sure is that Greece’s crisis, and indeed the Eurozone’s crisis, is not going away anytime soon. SYRIZA dissenters should use this time to fully examine how Grexit might be put into practise, and what the repercussions would be, and have that conversation with Greek society with a plan in hand. Because sooner or later the day might come when it is the only option left. The unsustainability of the Greek debt is now well known and accepted, as is the Eurozone's unwillingness to consider significant debt relief, which taken together can only spell trouble ahead. The government in the meantime needs to get on with governing, and modernising the Greek state, for there is still a lot of good to be done in reforms even if they can’t deliver on a euro without austerity.
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