Greece has been failed by eurogroup and Tsipras

In the wake of the Greek referendum Kostas Karkagiannis, the foreign business editor of Kathimerini newspaper, looks at how Greece was treated by the eurozone and Tsipras

Things look different when you examine them with hindsight. Now, I suspect that probably neither the eurozone nor Tsipras wanted to reach a deal on Greece’s debt programme. I think the eurozone’s preference was to kick us out from the start and Tsipras’ preference was to return to the drachma. The result is a systemic failure both at European and Greek level.

How different things would be today if the eurozone and the then prime minister Antonis Samaras had made a deal in September. And it was easy. All that was needed was for the troika to make some small concessions.

Perhaps Samaras was thinking of the almost certain election three months later that he knew he would lose, and wanted to set up the man tipped to win, Alexis Tsipras, and leave him a task that would see him go against his political rhetoric and do a deal with the troika. Samaras believed this would ensure that Tsipras would be in power for just a very short time before his government collapsed, allowing Samaras and his New Democracy party to ride into the rescue.

He probably did not care or consider that Tsipras failure would also mean the country’s failure. But we must also ask what was the eurozone’s goal.

This may seem a reasonable position until you look at Tsipras’ history of doing nothing constructive in opposition, a position he continued when he came to power.

He made huge mistakes, never proposing one single serious reform for Greece, and I insist that the root cause of this crisis is the near collapse of the justice system and the endemic tax evasion, but he never even approached reforming either.

But then, neither did the troika, despite having numerous opportunities to make this a priority over the past five years. The eurogroup only cared about fiscal consolidation and never addressed the issue of making the programme sustainable, both politically and economically.

The failure to agree a deal with Samaras and the failure to achieve reforms that would feed into the economy for the future constituted a systemic failure.

Nobody, however, imagined that the eurogroup would take such a hard line against Greece after five years where the country achieved double the fiscal adjustment of all the other programme countries combined. I will not talk about unemployed, the loss of disposable income, the collapse of the social welfare system, because few appeared to care about the effect of the austerity measures on the population — a situation I’m sure Irish people are familiar with.

All the eurogroup wanted was fiscal results and Greece delivered them.

In 2012, we were promised that once we achieved a primary surplus they would restructure the Greek debt to ensure it was sustainable and allow the country some room for growth — but this never happened.

It is true that we did not apply all the programme’s measures, such as privatisation, but then we spent at least two of the five years with much of the eurozone talking about Grexit, frightening off potential investors and leaving no option but to achieve a fire-sale.

Now the eurogroup, after five years and with GDP down 25%, is talking about reforms. But it’s too late because the programmes have failed politically, with the Greek people being subjected to double collective punishment — by its government and by the eurogroup — and this led to Tsipras being elected.

According to a study commissioned by the German Macroeconomic Policy Institute (IMK) during the programme years, taxation on the poorer part of the population increased by 337%, compared to just 9% for high-income earners. Average pay cuts in the generally better paid public sector were 8%, compared to 19% in the private sector.

We are the only country in the EU where there is no collective bargaining and now the troika is asking for mass firings while they and the Greek government are branding tax hikes and spending cuts as reforms. They are not — they are just cuts and tax hikes.

I can’t accept any more surrender of sovereignty to Brussels, not to the eurogroup, where German finance minister Wolfgang Schauble insists that the programme should be fully applied as it was devised in 2012, ignoring the massive changes.

Or where Jyrki Katainen, the former Finnish prime minister, now a Commissioner, says that elections change nothing. I’m 40 years old and for as long as I can remember people were talking to me about the EU and the vision to become better, to belong to the EU, where there is the rule of law and governments respect their citizens.

But this is not the Europe I wanted or was brought up to believe in, where Mr Schauble states that Greece should burn in order for the rest of Europe to be scared enough to accept further surrender of sovereignty.

I don’t want to have anything to do with this kind of union. The spectre of the eurogroup president Jeroen Dijsselbloem telling Greek MPs to vote down the government proposal for a referendum and withdrawing their last proposal. This is directly undermining the polity of a European state — I cannot accept this.

I am afraid of what is going to happen if we exit the euro but I’m equally afraid of Mr Schauble telling the former US secretary Tim Geithner that we must burn Greece to scare the rest of Europe. For the past five years, I thought we must be patient, and the cost of giving up now would be too great, but now I realise we are in a far weaker position than at the start of this crisis and, if we are patient for another few years, we will be in an even weaker position and I have no confidence that the eurogroup is going to adopt a reasonable policy. Added to this is that we have Tsipras as a prime minister, who is very divisive, has failed to achieve what is needed so far.

But now it is obvious that, to be part of the eurozone, governments must agree totally with the German position.

In recent years, the eurozone appears to have adopted an imperial attitude that believes compromise would be perceived as weakness and so insists on partners complying or being crushed. It may be dangerous for Greece to leave the eurozone, but it is dangerous for Greek democracy to stay in the eurozone. Maybe I will regret it but one has to abide by one’s principles and be ready to pay the price.