Tsipras and the Syriza mandate
by George Hatjoullis
A week touring Crete is a delightful experience. The people are the best Greeks. Speaking to people in our Cypriot-Greek elicited a positive and open response. Moreover, we understood each other, which is not always the case in Athens where the demotic Greek language of Homer was ‘cleaned up’ some years ago and banished to the Islands. The conversation always ended up on the subject of the debt crisis and Syriza and Tsipras. It was interesting, frank and consistent. Tsipras cannot yield to the Brussels group because he does not have a mandate to yield. The population would rather leave the euro.
Crete may not be a good sample of Greece and my sub-sample of taxi drivers, waiters, tour guides, hotel staff and the like may not be a good sample of anything. However, the consistency was notable. Moreover, the diversity was striking. Many were God-fearing Orthodox nationalists that would have expressed ‘better dead than red’ had they been americans. Yet they voted for Tsipras. They did so because he promised not to yield.
The Cretans are a friendly and hospitable people but fiercely proud and independent. Visit the Arcadia monastery, the scene of the 1866 uprising against the Turks (or holocaust as it is styled in greek), and you can see where the expression ‘freedom or death’ originates. Up in the villages of Psiloritis (Mount Ida) all the road signs are pitted with bullet holes. They use them for target practice. This is bandit country where villages still have vendettas (apparently) and people make a living best they can. It is a bit of old Crete. Wild and a bit frightening and a long way from the street upon street of tacky souvenir shops and overpriced tavernas and cafes along the beach fronts. Olives and goats are both in evidence in the mountains and little else. It is in these mountains that the Cretan character was formed and it is about as unyielding as the rocks. Tsipras cannot yield if Crete is any indication.
The problem is that Tsipras has made promises he cannot keep and that the people may not let him break. This is of no consequence to the Berlin-led Brussels group. They have conceded what they can (as far as they are concerned). It is no matter that the original package was inappropriate (as I argued at Societe Generale at the time) and doomed to failure and likely to put Greece into a debt trap. It has placed Greece in a debt trap and it is one that Greece cannot escape without politically unacceptable consequences. The Berlin-led brussels group does not care and is just as unyielding as the Cretans. The rock has now met the hard place.
Many of the reforms, including the pension reforms, are necessary. However, they are unsaleable. The only way Tsipras might sell them (and only might) is if they come with debt relief. This it seems is not on the cards because, for one thing, the likes of Spain and Portugal will not agree. The relief must come from the ESM and these countries are on the hook for ESM debts. We have an impasse and Greece is now friendless and alone. If Brussels wants Greece to stay in the euro it may need to yield because if the Cretans are any indication, Greece cannot. If you will forgive the expression, shit just got real.