As Greek party leaders struggled to put together a government in May 2012 after a splintering election, a major (and contentious) issue was whether to demand a renegotiation of the bailout agreement. Alexis Tsipras, leader of the Coalition of the Radical Left known as Syriza (which made large gains in the election), was declaring the agreement null and void given the mandate implied by the gains made on the far right and left (both being opposed to the austerity program). The New York Times reports that Tsipras believed he “had changed the debate to the point that the formerly dominant parties that had signed the loan agreement were . . . indicating they might agree to demand it be renegotiated.” Tsipras’s statements were enough to prompt a firm Nein! from Angela Merkel in Berlin and a related “tightening of the screws” from the committee of the European Financial Stability Facility.
On May 9, 2012, after a “lively discussion” among finance officials from the 17 states of the E.U. that use the euro, the E.U.’s European Council of Ministers (of the euro states) decided to withhold $1.3 billion from a $6.8 billion tranche scheduled for release on the next day. The Greek party leaders doubtless got the point: the spigot would be turned off were the agreement renounced by Greece.
It was not as if going back to the table was unheard of in the history of the E.U. The decision to treat the latest agreement as non-negotiable can thus be viewed as arbitrary. That it was the fresh input of the Greek people that had prompted new demands in Greece that the agreement be renegotiated makes the arbitrariness particularly suspect in terms of democratic legitimacy.
The strategy being pursued by the German officials was to make it seem like the decision to shut off the spigot, which would cause Greece to default and presumably have to give up the euro currency, was entirely that of the Greek party leaders. “We want Greece to stay in the euro zone, but whether Greece stays in the euro zone is in Greece’s hands, and it’s now a decision to be taken in Greece,” the German foreign minister, Guido Westerwelle, said in Brussels. However, the question actually rested as much on the German decision whether or not to renegotiate as on the Greek decision whether or not to do so. In other words, it takes two to tangle. For one side to act as if its hands are tied when they are not is disingenuous.
“One thing is clear,” Mr. Westerwelle said, “we stand by our promise to help. But that also means that the agreed reforms are implemented in Greece. If for whatever reason, which I’m not expecting, and which I expressly hope not, if Greece ends its reform course, then I don’t see that the next tranches can be paid.” Actually, the next tranches could be paid—meaning it would be possible. Treating what is actually a matter of discretion (i.e., the decision on whether to renegotiate) as one of impossibility is also disingenuous and logically flawed. Westerwelle was intentionally ignoring the possibility that the E.U.’s promise to help could extend beyond the last agreement—meaning that the promise could extend to include renegotiations—additional talks justified by the fresh input from the Greek electorate.
To be sure, a lot of posturing on both sides was undoubtedly going on. My point is that the artificiality of the “donor” intransigence ought to be recognized and thus held to be invalid, or at the very least as less than honest. A decision not to renegotiate is a decision nonetheless. As such, it should be owned up to by those officials making it rather than “exported” to the Greeks as if they had made it. False or artificial rigidity is an ugly thing that reflects on the character of those foisting it on a democratic populous.
Source: Rachel Donadio and Niki Kitsantonis, “Continuing Leadership Deadlock in Greece as Its Lenders Watch and Wait,” The New York Times, May 9, 2012. http://www.nytimes.com/2012/05/10/world/europe/new-elections-appear-likely-in-greece.html?pagewanted=1&_r=1&ref=world