Syriza as Catalyst: a ray of hope

by George Hatjoullis

The prospect of a deal has never been good without debt relief and this has not been evident in any of the offers to Syriza. In my view it was necessary for Syriza to go to the brink in order to elicit debt relief as part of the package. It was the basis of my blog suggesting the possibility of a 13th hour deal. The abrupt and unexpected announcement of a referendum on Saturday evening seemed to eliminate this possibility. However, if Syriza is willing to play the role of catalyst then all is not lost. There may still be a ray of hope.

A catalyst creates or accelerates a chemical reaction whilst remaining outside of this state change of the chemicals involved. Syriza has a chance to do just this for Greece. It can create a chemical reaction that bonds Greece to the eurozone in a permanent and sustainable way without itself being part of this bond. The referendum will be some question based on acceptance or otherwise of the last proposal put to Syriza by the Institutions. The opinion polls suggest that the Greek electorate will vote to accept such a proposal. The problem is that it is no longer on the table (and was never necessarily final). Given a yes-vote it is conceivable that the Institutions would be willing to reopen negotiations. However, it is inconceivable that they would be willing to do so with Syriza. The loss of trust with Syriza is complete and was sealed by this very referendum.

Syriza as catalyst could save the day. If Syriza was to resign on a yes-vote and hand over to a technocrat government to continue renegotiation, a new deal could be constructed. Moreover, a relieved eurozone might well be more accommodating, putting debt relief on the agenda. Certainly, debt relief must be part of any deal as otherwise it is nonsense to speak of debt sustainability. Greece cannot meet its debts under any set of reasonable scenarios. The gambit is not without precedent. It is precisely what happened in Italy at a crucial point in the crisis and this stabilised Italy and the eurozone. The key is that Syriza should step down for the good of Greece and the eurozone.

The Syriza rhetoric has included statements to the effect that their mission is to help the eurozone and the people of Europe and not just the Greek people. Well they have a chance. Syriza is recommending a no-vote so a yes-vote is a clear rejection of their approach. They came to power on a promise to renegotiate a better deal. If they are then told that their renegotiation approach is rejected, they should step down. It is the democracy to which they keep referring. Indeed this constant reference to democracy has been a divisive point in the negotiations. Syriza use the word as if they own it. What if the 18 other eurozone member states all held referenda to ask their people if they wish to underwrite Greece further? How would you like them apples Alexis? Syriza has a chance to save Greece and maybe even the eurozone. It need only step down on a yes-vote. We will see if they are statesmen with Greece’s interests at heart or just another bunch of power seeking politicians that cling to power come what may. Of course, the Greek people could vote ‘no’, in which case on their head be it.