Merkel and Hollande at the 17th German-French council of ministers, March, 2015. Demotix/ Jakob Ratz. All rights reserved.With slightly more than
half the ballots counted, "óxi" is set to win a decisive victory.
Since the first estimates were released, "No" has maintained a 20
point lead over "Yes". With a 65% turnout, Mr. Tsipras has every
justification in declaring a tremendous electoral victory for Syriza and for his
leadership.
He can thank the IMF
for that, ironically enough. Throughout the week, polls indicated that the country
was split down the middle. Then on Thursday, the IMF released a report that
confirmed what many have been saying for a long time: Greek debt really is
unsustainable and a large haircut should be included as part of any deal. That
must have been the game-changer; one thing is a suspicion, and another is the
senior creditor and Troika member publishing this in a formal report.
It is hard to believe
that the timing is a coincidence, for as Franklin Roosevelt once said: "Nothing
in politics is an accident. If something happens, it is because someone meant
for it to." That someone can only have been the United States, who has
been quietly urging a deal for months now.
Initial reactions from
outside Greece have been decidedly mixed. They show the existence of two camps:
ministers from France, Italy, and Belgium have come out saying that
negotiations should continue. Ireland might also fall in with the ‘pro-deal’
party. The IMF obviously backs a deal that includes reforms and a haircut; i.e.
some sugar and some crow for everyone.
On the ‘nein’ side are
the Germans, the Spanish and some of the eastern European states that have had
to put through very tough reform programmes of their own. German comments all
have a cheerful ring such as: "the Greeks have burnt their last bridge
with Europe." That puts Angela Merkel in a bind; it is clear she would
make a deal if one could be found that saved everyone's face. But now she will be
likely to have to face a party revolt if she tries to push through a deal with
the exultant Greeks.
However, this is not
the first time the Germans have said "nein" and then had to eat their
words. In fact, the history of the Euro crisis has been Germans protesting
loudly and then eventually caving in. It is possible that this will be the case
again. What Germany needs is a strong enough force to ‘oblige’ them to cave in,
as good Europeans. That is the trick with the Germans, the appeal to their
historic responsibility to European peace and solidarity. And no one does that
better than the French.
So it is noteworthy
that tomorrow's first agenda item will be a meeting between Chancellor Merkel
and President Hollande of the French Republic. That will undoubtedly be
followed by calls from IMF Chair Christine Lagarde, also French. President
Obama and Prime Minister Renzi will also surely call and press for a deal. And
it is very probable that Mr. Draghi, who has promised to do whatever it takes
to save the euro, will once again act on that promise; perhaps by extending ELA
support even slightly, as a clear signal of compromise.
If so, then it is
likely that the Greeks will have finally succeeded in their long applied tactic
of divide et impera, finding the
fault line among the European positions, playing on the Russian fears of the
US, and splitting them all asunder. If so, somebody will undoubtedly put up
bronze statues to Messrs Tsipras and Varoufakis. Greece will stay in the euro;
they will receive their desired haircut and probably some slight fiscal easing
this year and next. They will have to agree to some ‘hard’ – i.e. face-saving –
reforms, but they will win substantially everything because in the end, the
nuclear option paid off.
That would be
disastrous for Mariano Rajoy's Partido Popular in Spain; and it might very well
provide a boost to both Marine Le Pen's National Front and to Tory Eurosceptics
in Britain. Fodder for future crises.
On the other hand, if
I'm wrong, and the Franco-American pressure proves insufficient; then the
Greeks really will have burnt their last bridge with Europe. If that happens,
the US should have a contingency plan ready: a Marshall Plan II of humanitarian
and financial assistance. The Greeks are our allies and we should help them in
a time of need, even if Europe won't – especially if Europe won't. More
cynically (or realistically) the Hellenes must be kept in the NATO orbit and
such timely aid is the best guarantor of it.
One last possibility:
Europe may keep Greece only to lose Germany. If the German conservatives become
convinced that Mrs. Merkel will always sign the check when push comes to shove,
they may revolt for real. They will not accept an unlimited exposure of German
savings and funds to bail out the entire Mediterranean basin, the "Club
Med" as they disparagingly say.
We may be talking about
"Ausgang" next year. As I wrote earlier today, the
"Greferendum" was only the closing scene of Act 1. Act 2 in the Euro
crisis is imminent.
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