By EDWARD P. JOSEPH and ANNA TRIANDAFYLLIDOU
Published February 5, 2013
FOR Greeks suffering from the wrenching pain of a long economic crisis, a youthful savior has emerged. Alexis Tsipras, the leader of the second-strongest party in Parliament, the Coalition of the Radical Left, or Syriza, is not yet 40, but his relentless attack on austerity has made him a favorite to head the next government.
Tsipras has been visiting power centers in Europe and the United States to bolster his credentials and to press his case for debt relief. He argues that Europe is bluffing with its threat to expel Greece from the euro zone if it doesn’t implement severe cuts.
But even if Tsipras wins the next election, he is likely to fail in his bid for an international conference that would provide dramatic debt relief. The reason is that Greece’s main creditors, Germany in particular, suspect that Tsipras is bluffing as well. They know that the Greek economy hangs like a thread, and that failure to sustain debt relief would plunge Greece into economic free fall.
Thus the impasse over Greece that serves as a brake on Europe’s recovery and has left a quarter of Greeks unemployed is likely to continue — unless Tsipras widens his message. He could wring substantial concessions out of Germany and other creditors if he does what no Greek leader has managed to do: get Greeks to accept the need for national reform, not just austerity and not just debt relief.
The truth is that Greece is not only broke, it is broken. “Uncompetitive” does not describe the pathology of the Greek economy. It is a myriad of small businesses, unproductive subsidies, inflated state contracts and Byzantine regulations seemingly designed to inhibit productivity. In the past, it was sustained by tourism, olives and other small-scale produce, and, of course, loans — which have evaporated. Real relief for Greeks can only come from foreign investment, not loans and not debt relief. And few will invest in Greece without real reform. Indeed, some of Greece’s most successful companies are fleeing the country.
Ironically, even as segments of Greek society still unleash noisy protests, the public knows the truth: They are not innocent victims but willing, if small-scale, participants in a corrupt system. This helps explain why expressions of public anger have been — given the breadth of the disaster — relatively tame. A protest movement known as the “aganaktismenoi,” or the resentful, has emerged, demanding accountability. Long-concealed scandals have come to light, and some prominent members of the political elite have gone to prison, or face the prospect of being jailed. But there is no unifying agenda among protesters, many of whom are animated solely by the prospect of losing their benefits.
Moreover, for all their suffering, most Greeks are aware just how much worse their situation could become. They understand that they have a lot to lose if the country’s fragile banks collapse or if the country defaults. The value of their euro-denominated bank accounts, if converted into new drachma, would plunge.
If anything, anger in Greece is focused outside the country, at Germany in particular, or disgracefully, on the most vulnerable people — poor immigrants — who have benefited least from the country’s corrupt system. Either way, the misdirected anger only distracts Greece from much-needed introspection. And even when there has been reflection, such as the momentary pause in the spring and summer of 2010, Greece has been plagued by the paralysis of collective responsibility: “So maybe I didn’t pay my taxes, but who did?”
The focus of Greek energy these days is not on how to fix the country, but rather on how to survive within the existing system.
At their core, Greeks know better and are not condemned to perpetual cynicism and incipient poverty. They need a leader with the courage and the standing to tell them that the old ways of doing business will not return prosperity.
Greeks have proven that they can move toward meritocracy, as has been illustrated by the general public exam for public administration or university admissions. The unique aspects of Greek culture have their advantages and need not be discarded. Small changes, for example simplifying regulations and putting more information on legislation on the Internet, can have a big effect.
These measures can pave the way for consensus on the larger labor reforms demanded by creditors, very possibly winning the major concessions that Tsipras seeks. Soon, with support from civil society and the Orthodox Church, momentum toward national renewal could reach a tipping point, where the rewards of complying with rules will outweigh flouting them.
In short, Greeks do not have to “become Germans.” They only have to face up to the fact that you can’t get something for nothing forever. A politician with the courage to speak this truth and appeal for a new compact that matches individual and business responsibility with concrete steps toward state transparency can win an election, debt relief and real hope for a battered people.
Edward P. Joseph is senior fellow at the Johns Hopkins Center for trans-Atlantic Relations. Anna Triandafyllidou is professor at the European University Institute.