If a new deal for Greece, how will the others react?

You might see it differently, but seems to me, one of the challenges of securing any compromise with Greece is the fact that there are countries like Ireland, Portugal, Spain… that were in the similar situation as Greece and maybe they are not very happy seeing a new deal for Greece. E. g. Ireland says they will insist on similar deal if any secured by Greece. Read few comments.

Erik JonesProfessor of European Studies, Director, Bologna Institute for Policy Research, Paul H. Nitze School of Advanced International Studies (SAIS), Bologna Center, The Johns Hopkins University

The Greek situation is complicated because it plays out on two different levels.  Greek government officials must negotiate with their European partners, but Greek politicians must deal with their domestic constituencies as well.  There is nothing new in this dynamic.  On the contrary, it is one of the most well-studied features in international relations.  The fact that we have studied it, however, does not make it any less complicated.  Worse, the same dynamic is at work in other countries as well.

Consider the situation in Italy.  Italian politicians have to negotiate with Greek government officials and other countries in the euro area.  They also have to deal with the Italian electorate.  However, the difference for Italy as opposed to Greece is that the current government is not an opposition movement that came to power; it is a relatively robust and yet still potentially fragile coalition facing a growing anti-Europe opposition.  In that context, the Italian government can make the case for Greece and can be sympathetic toward Greece, but it has to be careful not to give fodder to its opposition domestically.  So far the Renzi government has been able to strike a good balance in that regard; having the Greek finance minister describe Italy as bankrupt is an unnecessary complication.

The situation in Spain is even more problematic.  You can see the same set of negotiations at the European level, but domestically the center right government has to square off against a growing Podemos movement that bears a passing resemblance to Syriza.  If the government appears soft on Syriza, then it gives ammunition to Podemos to ask why the government has not been tougher in its negotiations with Europe.  It also has to take the argument to creditor countries like Germany.  Hence taking a hard line on Syriza is the path of least resistance.

A similar dynamic is unfolding in Ireland, where the government faces a Sinn Fein opposition that could capitalize on perceived failures of the Irish government to win more concessions from Europe, and in Portugal, where the tension is within the coalition.  In both cases, the challenge is to keep a strong face viz. competing audiences.  In both cases, taking a strong line on Greece is easier than the alternative, because it does not force the government to admit its own weakness or failings in relation to negotiations with the rest of Europe.

Unfortunately, this dynamic is likely to lead to the isolation of Greece both politically and psychologically.  Greek politicians will not only find little support at the European level but they are likely to feel betrayed and victimized by politicians from other countries that appear to be in a similar situation.  That sense of missing solidarity is going to push Greek politicians to carve out ever more extreme positions.  And, in the resulting positional bargaining, any sense of common European interest is likely to dissipate.  By implication, the only way Greece will remain in the euro is if Greek politicians are willing to accept a humiliating loss of face – both internationally and domestically.  As you can imagine, that prospect leaves me increasingly worried.  Once you start dealing with matters of pride and political survival, it is easy to start making mistakes.

Michael Holmes, Senior Lecturer in Politics and International Relations, Liverpool Hope University

First of all, I don’t think all governments in bail-out countries will respond in the same way to the election of Syriza in Greece. I would distinguish between “true believers” – states that have adopted the bail-out requirements and austerity programmes and accept them as an article of faith – and “dissenters” – those who dislike the conditions but feel they have no alternative. I would certainly place Ireland in the former camp – the government there has always tried to portray Ireland as the “good boy” in the class, not just taking the medicine but enjoying it. Of course, if you go beyond the right-leaning government, there are different attitudes in Ireland. I know the other states less well, but from what I can tell, the governments in Spain and Portugal and Cyprus have not been too explicit in their statements, no doubt hoping to benefit from any easing of conditions negotiated by Tsipras &co.

Secondly, I think that while the Syriza government will of course prioritise Greece’s situation, they are at heart internationalists, and I think they would hope that if they can secure any concessions, that these would – and should – be offered to other states too. This is in Syriza’s interests – they seek a more fundamental shift in the direction of the EU, towards being an organisation with a much greater emphasis on solidarity and community among all 28 states.

Third, it is important to keep in mind that public pronouncements might not correspond to actual opinions. I am thinking here especially of the Irish government’s stance – I think that while they will talk and talk publicly about being ‘responsible’, they would of course happily accept any relaxation of debt terms that is on offer.

Fourth, probably more important for Greece is the reaction in some key non-bail-out countries. Tsipras needs allies at the European level, and in the absence of a Podemos government in Spain, he will look to the likes of Francois Hollande and the Socialists in France and Matteo Renzi and the Democrats in Italy. He will also be hoping to see some more sympathetic discourses emerging in other countries, perhaps from Die Linke and the Greens in Germany (I noticed an article last week in the Guardian newspaper where Joschka Fischer was calling for a more accommodatory stance towards Greece and other debt-burdened states), from the Socialists in the Netherlands and so on.

I think there is a real challenge for the EU – its political structures are intended to work on the basis of consensus and compromise, not on the basis of political division and debate. That has worked passably well for some time, but now it has to deal with some very fundamental disagreements, ones which are not readily solved by the usual Union methods. But at the heart of this challenge is a democratic essential – the politics of consensus and compromise are the ones that have led to a surge in euro-scepticism, as ordinary EU citizens feel no sense of agency or engagement with the remote decisions emanating from Brussels and Frankfurt.

Frank HägeLecturer in Politics, Department of Politics and Public Administration, University of Limerick

Yes, that’s exactly the problem. By making a deal with Greece, the EU would set a precedent and put in doubt its entire approach to tackling the crisis so far. And governments that pushed through painful reforms in their countries to conform with the EU’s requirements would look like fools domestically. These governments all face competition from radical left-wing parties with similar demands, and there is a good chance that they would be voted out of office if the new Greek government is successful in renegotiating its bailout terms.

This means that neither debtor nor creditor countries have any appetite for concessions and the prospects for a compromise are very bleak. If the Greek government caves in, it will receive some modest face-saving concessions, which won’t alter the current Greek situation fundamentally (for the better or worse). If it continues to play hardball, there is a good chance that the other member states will simply refuse to support it any further. The Greek government seems to believe that a Greek exit from the Euro area would be too painful for other member states to contemplate. However, the other member states might think that some short term economic pain is well worth paying for a functioning monetary union in the long term.

Paulo Vila MaiorAssistant Professor, the Faculty of Human and Social Sciences, University Fernando Pessoa

Recent elections on Greece pave the away towards an earthquake on EU politics. Recent statements from Tsipras and Varoufakis triggered disorder within diplomatic channels in member states and EU institutions. Despite moderation aired right after Syriza won the election, Greek officials show some signals of throwing radicalism into EU politics. The renegotiating of Greek external debt and the unilateral decision to stop collateral austerity measures that deprive many Greeks from decent living conditions are the cornerstones of potential European disorder. Since the early reaction of key players (some national governments, especially Germany, the European Commission, and the ECB) did not meet Greek government’s claims, Tsipras and Varoufakis are putting radical solutions on the table: a new loan, not an extension of the bailout programme; and the threat to ask Germany to pay a huge compensation that goes back to Greece occupation by German troops during World War II.

All this suggests four comments. First, democracy is undergoing a re-interpretative exercise. Amidst euphoria for the results of Greek elections and for the rupture they might represent in the context of the Eurozone crisis, many claim that new solutions are judged necessary for respecting the electoral contract between Syriza and the majority of Greek citizens. Such approach, however, misses the nature of EU politics and the embedded transnational bargaining rationale. On the one hand, rules exist and to change them requires agreement of a qualified majority of national governments (or even unanimous agreement, in certain cases where EU constitutional rules are at stake). On the other hand, the democratic legitimacy of the Greek government must be balanced against other national governments’ democratic legitimacy, since the electoral contract between a majority of these governments and their citizens is based on the current status quo. It seems of doubtful democratic legitimacy that a single country (Greece) imposes a solution on others.

Second, the arrogance of orthodox policy-making, notably the current austerity political economy tied to fiscal policy discipline, is countered by a similar, albeit of different nature, rhetoric. Different “TINAs” (“There Is No Alternative”) are opposed: pro and against austerity. Categorical imperatives from both sides do not differ in kind. This prevents an arrogant rhetoric from being intellectually superior to the other. Importantly, it is too soon to warrant the alternatives proposed by the Greek government (and their allies) with better outcomes. The impact cannot be estimated in anticipation. At this point, to claim that alternative solutions envisaged by the Greek government are better is a manifestation of arrogance as well.

Third, renegotiation or default open a big Pandora box. For those who argue that the Greek debt must be renegotiated, this is the scapegoat for the survival of the Eurozone (and, maybe, the EU as well). The prospect of unilateral default is daunting, not only because Greece would step outside the Eurozone but also for negative externalities to other Eurozone countries that are in the “next-Greece-to-collapse” scale. Conversely, an agreement involving a substantial renegotiation of the Greek debt, perhaps with some sort of haircut, might feed other countries’ claims that their external debt should also be renegotiated. Considering the reluctance of largest contributors to the EU budget to raise inter-state solidarity standards, a solution only for Greece might raise claims of unfairness from other national governments and, thus, spread disorder within EU politics.

Fourthly, the revival of historical ghosts is not a wise strategy at this point. Claims of monetary compensations for the German occupation of Greece during World War II are an illness that feeds a fire that is already burning. This is either a bluffing approach to negotiations (that, nevertheless, re-ignites past ghosts and historical recriminations) or a delusional proposal aiming at getting a substantial haircut of the Greek external debt through an historical penalty implemented out of time. If Syriza and the Greek independent party insist on this, an important setback on European integration is expected.

Alex Warleigh-Lack, Professor, The School of Politics, University of Surrey

It’s been obvious for along time that Greece can’t repay this level of debt, and that it needs to have a huge chunk of them forgiven. I think the new Syriza-led government has a lot of credibility in this regard, because it really does have an interest in wiping out corruption in Greece, which no previous government has wanted to attempt. So if the EU’s other leaders are smart, they’ll look to drive a bargain which is hard in terms of anti-corruption and making a workable tax system, while forgiving Greek debt or delaying payments until so far into the future that it amounts to the same thing.

The real problem here is that over the last 40 years the European economy has been steadily integrated into a single space, but governments remain national in their focus, and most politicians are unsophisticated in their economic understanding. I think that tragically it’s really unlikely that Greece will get a deal of real substance unless Germany and the other neoliberal states are willing to contemplate a policy change. So if I were in the new Greek government, I’d be preparing to play hardball, pointing out the mutual interest in a policy shift while also seeking allies in states like Spain and Ireland, who could also benefit from a fresh approach. If their partner states are really prepared for Greece to go to the wall, then they deserve what they get when the resultant chaos causes a storm. Anyone who doesn’t think that speculators and ‘the markets’ would seek to take advantage of a Grexit are irresponsible and stupid.

Roman GerodimosSenior Lecturer in Global Current Affairs, The Media School, Bournemouth University

I definitely think that other countries who are in a similar situation are very reluctant to take the side of the Greek government. The most important thing that Mr Tsipras needs to do tomorrow and next week is build a coalition so as to avoid being isolated – and to turn this into a broader debate about the architecture of the Eurozone as opposed to one about Greece’s particular circumstances…


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