Wed | Aug 23, 2017

Greece’s provocative election

Published:Monday | January 5, 2015 | 1:00 AM
German Chancellor Angela Merkel

Last week, the Greek parliament failed to elect a new president. Greece will now have to hold snap elections in the hopes a new government will manage to resolve this impasse.

The election opens what will likely be a turbulent year in Europe's politics. The Eurozone is still struggling to emerge from the long recession that followed the Great Crash of 2008. Severe austerity in some of the countries which had run up the greatest debts, in particular Greece, have only worsened the pain. The Greek economy may officially be rebounding, but it is hard for ordinary Greeks to feel it.

After years of high living and wonky bookkeeping, six years ago the Greek government admitted the true scale of its public debt. Suddenly, the country made Jamaica look like a Scottish spinster. Everyone dumped Greek bonds, interest rates soared, and in 2009 the country faced fiscal collapse. Contagion spread to other countries on Europe's periphery, including Spain, Italy, Ireland and Portugal. It took an aggressive bailout and intervention by the European Central Bank to arrest the crisis.

But to many observers, everything done so far has merely bought time to find a durable solution. And the problem is, once panic stopped, the search slowed down. Northern European countries, led by Germany, have blamed the big spenders for getting themselves into trouble, and expect them to bear the brunt of adjustment. But the profligate countries, not without reason, complain that Germany was all too happy to underpin their spending with a strong euro for as long as the money was spent on German goods. In other words, Germany was happy to let them run up its bar tab during good times, but then stiffed them with the bill.

extremist politics

Pitting the Germans against the Greeks, austerity has thus revived unpleasant memories of the Nazi occupation during World War II. Unemployment in Greece is at Third-World levels, social spending has cratered, suicide is up, and former professionals live rough in the streets of Athens. Needless to say, this has fuelled the rise of extremist politics. On the far right, the Golden Dawn blames all of Greek's woes on immigrant workers. Bands of its thugs terrorise foreigners and organise Greek-only food handouts. On the far left, - Coalition of the Radical Left - has soared in popularity with a pledge to tear up the bailout agreement and end austerity.

Although it could not likely win an outright majority of seats in parliament, Syriza may well end up leading the next government. Should that happen, and should it stick to its promise, it will create a showdown with Germany and Brussels (the European capital). That alone may re-ignite the European crisis.

insurgents on the rise

Complicating matters is that the Greeks don't stand alone in their anger with Europe. In several countries, anti-establishment parties are surging. Elections later this year in Spain and Britain will likely put parties of the far left and right, respectively, within grasping distance of power. Meanwhile, in several other countries, including Germany itself, insurgents are nipping at the heels of government.

The Greek election may rally Europe around a campaign to win back popular support for its programme of economic adjustment. But I wouldn't bet the farm on it. Few of Europe's current crop of leaders has much of a Pan-European vision. By and large, they play to their home audiences. And in Germany, for instance, blaming the Greeks for their own misery sells well in Swabia.

The one hope may be that German Chancellor Angela Merkel, who recently showed broad vision in her stare-off with Vladimir Putin over Russia's intervention in Ukraine, might be coming to accept she must step into the role of European leader. One thing seems likely, though: the European crisis is a drama that may have had a long intermission, but whose closing curtain hasn't yet fallen.

n John Rapley lectures at the Centre of Development Studies at the University of Cambridge. Email feedback to columns@gleanerjm.com.