Since the 2010 bailout of their crumbling economy, Greece has earned a reputation as the black sheep of the Eurozone. A combination of institutionalised corruption, widespread tax evasion, poorly managed government deficits and the Great Recession of 2008 meant that the Greek government could not maintain its debt and needed a rescue package with a hefty €110 billion price tag at the expense of Troika (the Eurozone countries, the European Central Bank and the International Monetary Fund). The harsh austerity measures that were the conditions of their salvation has hit the Greek people hard, and a once great country has been put on its knees.
Five years on and Greece has been crippled by the government cutbacks and increases in taxation, with unemployment and homelessness rife across urban areas. Bubbling under the surface is a strong national sense of humiliation coupled with a deep resentment for their creditors. The central concern is sovereignty, as people ask why their government has been left powerless at the hands of the Eurozone who, in their eyes, in under the thumb of Germany. This discontent has been clear to see with years of violent anti-austerity protests and the landslide victory of far-left Syriza party.
Another national disquiet is fairness; are these austerity measures really fair? As noted by Euclid Tsakalotos, the Greek Minister for International Economic Affairs, the figures show that the austerity measures imposed upon them has done more harm than good. Since the bailout national GDP has fallen by around 25%, with unemployment averaging around 30%; hardly the figures one hopes for from a country with €240 billion worth of combined debt. On the other hand, however, the Eurozone countries argue that austerity has been a fair exchange for the sum of money provided and that Greek economic downturn is simply unavoidable. In other words, it’s tough luck for the Greek people and they should do as they are told.
And so has begun a battle between Greek pride and Eurozone credibility as the deadline approaches for the renewal of the bailout agreement. The newly elected Syriza party, still glowing from their recent victory, have high hopes of restoring their national status and regaining control over their countries economic future. Up against them is Germany, the most powerful player in the Eurozone and a central figure of the EU, which wants to maintain the Troika’s credibility as a strict creditor whilst protecting the best interests of the EU.
February has been a month of standoffs and compromises, as the talks range from constructive to deteriorating as each side tries to stamp their feet a little louder. What is at stake is more than money, it is face and principles. If Greece were to get the agreement they wanted then the Troika would seem weak and ineffective, and yet if Syriza fail their election promises they will be at the mercy of the fury of their nation. What we have is an awkward arm wrestle between lord and subject, as each wait for the other to tire and concede.