Greece has More Bargaining Leverage than its Politicians Understand
When former Greek Prime Minister Papandreou proposed a referendum for the Greek people to decide on whether to accept continued austerity and the “grand barter” agreed to by Greece’s new troika of slave masters, we learned something. As European bond yields went soaring from Spain across to Italy and even up to France, and as European kingpins arms went flailing up into the air in complaint, something became plainly clear. Greece has more bargaining leverage than its politicians understand.
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What is unclear is whether he knew what he was doing or not, but the former Greek PM was ridiculed across the American popular press and across Europe for his ignorant, if not negligent action. Though, we questioned within these pages whether it might be pure genius or simply his soft heart at work behind the untimely and completely unexpected political posture. We also wondered if the respected legend of Greek politics might even be reading our column, considering that we had suggested Greece’s politicians ask Greeks what they wanted just days before Papandreou’s so-called shocking proposal.
How the move will work out for PASOK in February remains unclear, but I would assume the sacrifice of Papandreou will save some seats in Parliament. It even gives PASOK a chance at the premiership, something that was highly improbable otherwise. But more importantly, we should take note of the reaction of Greeks, which was one of introspection; of the markets, which was catastrophic; and of the look in the eyes of European leaders, which was one of fear.
Greeks suddenly had to approach the situation from the perspective of the nation on the whole, for turning down foreign aid and turning away from austerity measures would also lead to Greece’s disorderly exit from the euro zone. That’s not something that even the hardest hit of Greeks are sure would be in Greece’s best interests. The result of this might perhaps lead an unemployed Greek to a café to think deeply about the issue, rather than to start fires at the steps of the Parliament.
The markets were shocked, with debt yields across other at-issue European states soaring just days after all seemed finally set straight. The markets anticipated an even more serious loss of confidence in the European Union and in the euro zone. After all, if the EU could not cure Greece, due to the interests of Greeks, then perhaps the same result would follow in Spain and Italy, and if Italy, then why not also France. That reality set European politicians straight, so to speak, and allowed us to see clearly that the great homeland of our ancestors did not have to just accept whatever proposals the stern troika declared at us. Indeed, Europe has a stake in Greece, and in keeping it intact in the euro zone.
Therefore, Greek politicians have been grossly underestimating their bargaining position with the troika. The constricting austerity measures shoved down the throats of Greeks do not have to be so burdensome to our economic sustenance, nor to growth. We have the power to demand a longer time-line to meet debt level goals and repayment requirements. We can experiment with creative, growth encouraging policies, and ease austerity on our nation to correct its inherent flaws in a manner less disruptive to a way of living embedded in today’s society. Therefore, social upheaval could be mitigated, and Greece could find a way out of this mess with its integrity intact and the finances of its people in existence. I suggest Greek politicians reconsider, and realize that they hold a stronger hand than they’ve been told. They should reweigh the fact that there is a consistency of Greece’s goals with those of the troika, the greatest of which is to keep Greece within the euro zone.
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