European Commissioner Günther Oettinger said that Greece may need humanitarian assistance starting this week. The Greek health minister responded with reassurances that the country has enough medication to last three months, and the minister for citizen protection pledged that the police would stand by the people in this difficult hour—meaning that it would not allow the riffraff to rob ordinary citizens. But considering the fact that billions of Euros have been cashed out from Greek bank accounts in recent days—and that most of this cash is now held in private homes without metal doors or barred windows—ordinary citizens have reason to be concerned.

Deep Depletion

Of the 5,000 ATMs in Greece, 700 were bone dry by Sunday evening. The rest were objects of much pleading and prodding.

Alexander Baunov
Baunov is a senior fellow at the Carnegie Moscow Center and editor in chief of Carnegie.ru.
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There was (and is) nothing with which to fill the ATMs. In sum, there is about 2.3 billion Euros in cash in Greece right now. A withdrawal limit of 60 Euros per day was introduced on Monday, June 29. And then it came time to pay pensions. Greek pensioners were told that they would be able to receive up to 240 Euros each at one of 850 participating bank branches. The banks would let in one person at a time while the rest waited outside. The senior citizens were warned that they would have to wait for many hours in the Greek sun. Given that there are 2.5 million pensioners in Greece, the banks calculated that just this week’s pension payments would eat up 600 million of their cash supply; they proposed a daily cash withdrawal limit of 20 Euros. The next step will have to be ration cards

But what if your house is undergoing repairs? What if your children are studying abroad and you need to send them money for tuition or living expenses? What if your elderly mother is waiting for a scheduled operation in Germany? What if your Russian business partner expects you to pay for recently-delivered fertilizers? To account for such potential scenarios, the Bank of Greece has promised to consider international transfers on a case-by-case basis.

The European Central Bank is not going to send any more cash than it has been sending since February under the Emergency Liquidity Assistance program. For now, Greece is eligible to receive a small quota as a member of the eurozone. 

What about the foreign tourists? The Greek government tried to bluff that the limits would not affect foreign bankcards. In addition to cultural tourism and beach tourism some were now expecting a new trend: cash-out tourism. But this is unlikely—an empty ATM will not churn out banknotes just because you have a foreign passport. 

The country plagued by all this chaos is a member state of the world’s most prestigious international political, currency, and visa unions: The European Union (EU), the Economic and Monetary Union (EMU), and the Schengen Agreement. But now, both longtime EU hopefuls (Turkey) and veteran members (the United Kingdom) are having second thoughts about their relationship to these institutions.

Greek banks and stock markets have been closed since Monday, June 29; they will remain closed for at least six days. Perhaps the Lord shall use these six days to create Greece anew, before taking a seventh day to rest?

Professional Protesters

Judging by the carefree way that journalists and financial analysts dispersed last weekend, they expected that Greece and the EU would work things out. After all, this was not the first crucial deadline or the first challenge in negotiating with the intransigent Greeks. It was as though for the last five years running the rosy-fingered Eos, the ancient Greek goddess of dawn, would simply awake, turn on her computer and see that the parties had either signed a new agreement in middle of the night or had extended the old one—either the Achaeans had sailed off with their ships or the Trojans had drawn in the horse. But on Monday, June 29, she awoke to find that nothing had changed and no one had budged.

Everyone assumed that if the Greeks were taking their sweet time so boldly and nonchalantly, they must have some sort of a plan. Their government must have a strategy—at a minimum, some benchmarks or a checklist of major points.

Somehow everyone managed to forget that the current Greek government—unlike others that came before it—consists of politicians who have never governed anywhere and probably have no intention of ever doing so.

Greece’s Syriza party and its predecessor Sinaspismos—and earlier still, the Eurocommmunists and traditional communists, the anarchists, Trotskyites, Kropotkinites, Bakuninists, et al— never planned or expected to be in power. The entirety of their administrative and political experience was limited to organizing protests, arm-twisting the government, forcing compromises, and compelling concessions. 

As the new Greek government, they have tried to do this with the European Union and with other creditors and partners. They maintained their modus operandi upon coming into power. But now they are facing a serious array of players outside Greece rather than their familiar domestic opponents.

A party of professional protesters is now calling the shots in Greece. So why are we surprised that their time in office has yielded little except more protests? In recent decades, Greeks have gotten used to negotiating with the government through pickets and protests. But what works at home, doesn’t work abroad.

Striking Students

Ever since the Marxists came to power in February 2015, many observers have wondered about their methods, strategies, and modus operandi.

But their entire way of running the country comprises of trying to do in government what they had done in the leftist opposition. The very first thing a young Greek politician—or a left-leaning Greek political activist—learns in college, if not in school, is katalipsi (κατάληψη), or occupation.

Student activists can “occupy” their campus to protest almost anything—their university’s advisory board, the class schedule, the professors, the dean, the superintendent, the cost of student housing, the quality of free lunches, etc. The activists barricade lecture halls and administrative offices, plaster the campus with posters, graffiti the walls with slogans, and announce that there will be no classes, studying, teaching, reading, or writing until their demands are met. Anyone with a thirst for knowledge is a traitor to the common cause. The Greek police generally stays off college campuses, particularly since the military junta’s 1973 crackdown on a student uprising at Athens Polytechnic resulted in the deaths of 24 civilians. So, college administrations eventually enter negotiations, make concessions and find compromises.

Greek Prime Minister Alexis Tsipras, as well as key members of his Cabinet, such as Finance Minister Yanis Varoufakis and Minister of Energy and Environment Panagiotis Lafazanis, all cut their teeth in this “occupy” movement.

Syriza on the Sidelines

So why was everyone so carefree and optimistic when they decamped last Friday and why were they at such a complete loss upon returning on Monday morning?

It all began back in February, when the new Prime Minister Tsipras, along with most of his Marxist ministers, showed up—without ties—at the presidential mansion and declined to take an oath on the Bible or to accept the blessing of the Archbishop of Athens. The Hellenic Parliament’s new speaker Zoi Konstantopoulou strolled in wearing red trousers and a bright-yellow jacket. Finance Minister Yanis Varoufakis—then unknown but now a bigger celebrity than Tsipras—rolled in on a huge motorcycle, all clad in black. 

Back then, a memorandum was in effect between Greece and its creditors whereby the Greeks accepted austerity measures, while Europe and the International Monetary Fund (IMF) helped Greece pay off its debts, which had already been restructured on favorable terms.

A so-called troika of inspectors from the IMF, the European Central Bank and the European Commission monitored Greece’s compliance with the austerity measures. European commissars set up shop in the ministries of Athens and continuously sent for Greek ministers, corporate CEOs, and pension fund chairmen. Tsipras promised to banish the commissars from the ministries, to get rid of the inspectors, to terminate the memorandum, and to reach a new deal with Europe and the IMF. The population backed him. After all, over the five years that the memorandum had been in effect, Greece’s debt in absolute terms had only grown.

Surprisingly, Syriza did not come to power with calls for the proletariat to cast off their chains. It came to power with a perfunctory Keynesian program, positing that if the Greeks lived better and spent more money, the country would experience economic growth, yielding money that Athens would be able to use to pay off its debt. 

At his very first meeting with European Parliament President Martin Schulz in February, Tsipras explained that what the Greeks needed in order to spend more and live better was for Greece to have most of its debt written off and the interest payments frozen, and to be able to pay off the remaining obligations as economic growth took hold. Tsipras also asked the European Union to extend the existing assistance program by half a year without Greece agreeing to extend the old terms of the memorandum. His government was to use this time to prepare new proposals. German Chancellor Angela Merkel saw his proposal for what it was. She summed it up with Germanic frankness, saying that Greece wanted to continue getting money without continuing to fulfill obligations.

During the first visit of Eurogroup President Jeroen Dijsselbloem to Athens, Greek Finance Minister Varoufakis renounced the troika and the memorandum, saying that Greece did not want the money under the existing terms. It’s as though he were saying, “You needn’t help us, and we needn’t pay you. A default? Fine then, default it is.” 

This is when Greece began its “Occupy Europe” campaign. The young Greek ministers made themselves at home on the European “campus,” put up their posters, graffitied the walls, and announced that no one would be able to go on with daily life, their work, or their pursuit of happiness while they continued their katalipsi.

Meanwhile, Syriza began implementing its political program. It canceled the privatization of state-owned monopolies, reversed cuts in benefits, and re-hired 3,500 “unconstitutionally dismissed” government employees—including several dozen cleaning women who had set up tents in front of the Ministry of Labor building to protest their dismissal. One needs to be a European to understand why these cleaning women spent weeks trying to get back their government jobs instead of finding somewhere else to clean.

Surprise Referendum

The “Occupy Europe” campaign lasted four months. During this period, Greece and the EU tried to coordinate the terms of a new assistance program with the IMF to replace the terminated memorandum. At first the process was just like the student protests.  There was no agreement, but Greece continued to receive assistance.

For this reason, when another deadline came up, few were seriously worried. After all, Greece, the EU, and the IMF had all bandied about talk of steps forward and possible compromises. However, as the end of the old program drew nearer and the scheduled date of the 1.5 billion Euro payment came and went on June 30, Greece still did not have a new agreement with its creditors.

Then, at the end of last week, the IMF prepared its final recommendations for a new agreement—what to cut, what to tighten, what taxes to raise, etc. Greece rejected them. The European Commission responded with a compromise proposal, published on its website. Prime Minister Tsipras declared that the compromise proposal was just as bad as the recommendations of the “tyrannical” IMF, that the European Commission did not ask for Greece’s opinion on the compromise, that the proposal was an ultimatum, and that the Greek people would decide whether to accept it through a referendum.

Tsipras said that he would personally call upon the population to reject the “ultimatum,” but asked the European Commission to continue financial assistance for a week until July 5, so that the referendum scheduled for that day could be held undisturbed. Finance Minister Varoufakis, who was in the middle of negotiations, learned about the referendum from Tsipras’s Twitter account—in the past one would have used the phrase “read about it in the papers.” 

Now the Greek people must vote on a complex 10-page financial agreement with lots of fine print, statistics, data, economic terms, and punctuation guides. This is only half of the problem. Citizens do vote for complex legal documents, such as constitutions, at referendums. The real issue is that, from the viewpoint of the creditors, the agreement that will be voted on at the referendum does not exist, since it is the product of the very negotiations that Greece unilaterally abandoned on Saturday, June 27, thus annulling their result. 

Stormy Seas

The European Union bureaucracy turned out to be less pliant than the Greek governments that the Syriza ministers used to oppose and have now replaced. There is a lurking hope that these unnecessary problems will yet be resolved. But the psychological threshold has been crossed. The agreement was not signed and the deadline was irreversibly missed, and yet the world did not come to end. The next step logical step was defaulting on the June 30 payment to the IMF. 

Europe, which calls for all problems to be resolved democratically, has stumbled upon the limits of democracy. How does one vote to receive a new loan or get an old one written off? What resembles democracy at home looks more like the use of force in the international arena—an “occupation” of the common European campus.

Yet Europe also cannot object to a democratic procedure. The Europeans have thus accepted the idea of a referendum on a compromise agreement that de facto no longer exists. If, following their vigil by the ATMs, the Greek people vote in favor of the document, Tsipras presumably must leave the government, since he opposed the agreement. Then Europe could sign an agreement with a new government following early elections—provided that Greece can make it that far. If the Greeks listen to Tsipras and vote “no,” the financial issue will become a foreign policy one. Europe certainly cannot save Greece against its own publicly expressed will.

Five years ago, at the very beginning of the crisis, then Greek Prime Minister Georgios Papandreou addressed his people: “We have inherited a ship about to sink. Our partners will offer us a safe haven where we shall rebuild the vessel from solid and dependable materials. We are on a difficult path, a new odyssey for the Greek nation, but now we know the way to Ithaca, and we have charted our route.” 

Speaking at the St. Petersburg Economic Forum the other day, Alexis Tsipras continued the maritime metaphor, saying that the Greek ship is in the middle of a storm, but that the Greeks are a seafaring people, unafraid of going into open seas and discovering new shores and new, safe ports. When made in St. Petersburg, this statement sounded a bit like a threat—we’ll sail away from Europe, enter open seas and find a harbor somewhere else; after all, the world does not end with Europe. Even Vladimir Putin didn’t open his wallet when he heard that one. For now though, Greece remains in open seas and the storm is only getting worse. 

By:
  • Alexander Baunov