Big lesson for Tsipras: Don’t mess with Merkel
ALEXIS Tsipras is flaunting the cardinal rule of political survival in Europe: Don’t displease Angela Merkel. The German chancellor’s disapproval helped end the political careers of former Italian prime minister Silvio Berlusconi and Greek leader George Papandreou.
After burning through whatever goodwill he had with Merkel’s lawmakers and the German public, the current Greek premier could be next.
The support of Merkel, politically secure in her 10th year leading Europe’s largest economy, is essential for debtor governments. Tsipras upended talks with his creditors last week calling a referendum on German-inspired austerity, a decision that left him few options if voters accept budget cuts as the cost of aid.
“We are watching the end of the political career of Alexis Tsipras,” Jacob Kirkegaard, a senior fellow at Peterson Institute in Washington, said. “Mr Tsipras can continue his career on T-shirts for students, replacing Che Guevara.”
Merkel says there will be no further debt negotiations with Greece until the outcome of the referendum is known. Euro-area finance ministers echoed that line following a conference call late on Wednesday. “It’s the legitimate right of the Greeks to do that whenever they want, on whatever question and with whatever recommendation the government wants to give,” Merkel said in a speech to parliament. “But, to be clear, the other 18 euro member states have the same democratic legitimacy to duly take their position in response to the Greek decision.”
Refusing to play ball with Germany did not turn out well for Berlusconi, whose premiership had survived innumerable court cases and a tawdry sex scandal. A senior lawmaker from Merkel’s Christian Democrats spoke for her party when he urged Berlusconi to resign in November 2011 to allow Italy to fix its economy. A few days later he did just that.
Similar lesson
Papandreou learned a similar lesson the same year. When he called a bailout referendum, Merkel insisted to him that the question focus on remaining in the euro. The ensuing turmoil in Greece, and within his own socialist party, forced Papandreou to resign and the vote was scrapped.
Whether Tsipras, the former communist organiser, can continue in office will depend largely on the outcome of the plebiscite on Sunday. His left-wing Syriza party is urging voters to reject the programme of tax rises and spending cuts proposed by euro-zone finance ministers.
When asked by a Greek television interviewer if he would resign if he loses in the referendum, he said, “I’m not attached to the chair. I’m in this position because of the will of the people,” he said. “I will respect the will of the people.”
While Merkel disputes that she seeks to interfere in other countries, her influence isn’t universally welcomed at home.
Gregor Gysi, parliamentary leader of Germany’s anti-capitalist Left party, on Wednesday alleged that Merkel is trying to foment regime change in Athens.
“You want to get rid of the leftist government in Greece, that’s your goal,” Gysi said in a parliamentary debate. He cited Merkel’s refusal to engage in aid negotiations before the referendum. “That’s the proof. It’s because you hope that the government will fall on Sunday,” he said.
The view from Athens reflects a similar perspective. When asked yesterday if Merkel is pushing for regime change, Finance Minister Yanis Varoufakis cited a stock phrase uttered by a fictional British politician. “You may very well say that,” he said. “I couldn’t possibly comment.”
GREEK voters are almost evenly split heading into a referendum on Sunday that European leaders say can plunge the nation into economic darkness.
A poll cited by euro2day.gr said 47 percent were leaning toward a “yes” vote, an endorsement of austerity and the international bailout. The “no” camp, the government’s position rejecting those terms, was 43 percent. The margin of error in the survey of 1 000 people was 3.1 percentage points.
The battle lines ahead of the vote appeared immovable after a day of posturing in the wake of the expiry of Greece’s bailout deal and it missing a payment to the International Monetary Fund (IMF).
Politicians across Europe poured scorn on Prime Minister Alexis Tsipras’s strategy; he said the “no” vote would improve his leverage.
Greece was facing a “terrifying” economic free fall, Spanish Finance Minister Luis de Guindos said. His French counterpart, Michel Sapin, said: “We can’t have an accord with someone who says ‘no’.”
Stocks, bonds and the euro were little changed following Wednesday’s gains, which reflected signs of a thaw.
Tsipras’ appeal on Wednesday to use Europe’s proposal as a basis for talks was accompanied by his demands. He wants to delay implementation of the zero-deficit clause for retirement funds and other pension reforms until October instead of July, and maintain a 30 percent discount on sales tax for islands. He also wants to proceed with changes to collective bargaining rules.
Creditors are insistent on pension reforms that would bring savings of as much as 1 percent of gross domestic product by 2016 and immediate steps to eliminate early retirement benefits and allowances for lower pensions.
Meantime, banks are shut for a fourth day and Greek media have begun to speculate that deposits will be seized to bolster their finances.
Emergency support
In Frankfurt, the European Central Bank maintained its emergency support for Greek lenders following Greece’s failure to repay $1.7 billion (R20.7bn) to the IMF. The cap, which was frozen after the referendum was called, was kept unchanged.
With Greeks limited to daily withdrawals of € 60 (R812), the decision by European Central Bank policymakers gives the country more time for a political solution to succeed. Following reports of his letter to creditors, Tsipras addressed the nation to quash speculation that he might cancel the referendum. – Bloomberg