Interview to the Chilian newspaper El Mercurio of Santiago and Valparaiso.

Interview to the Chilian newspaper El Mercurio of Santiago and Valparaiso.

 

ANDREAS ANDRIANOPOULOS

- DIRECTOR INSTITUTE OF DIPLOMACY AND GLOBAL AFFAIRS AT THE AMERICAN COLLEGE OF GREECE

- FORMER GREEKMINISTER OF TRADE


 

Is this weekend a “turning point” not only for Greece but also for the European Union?


ANDREAS ANDRIANOPOULOS: For Greece perhaps, but not necessarily for the European Union. For Greece, this election is a strong test for the political class and, by extension, for the Greek people. Can they achieve a minimal consensus on the required reforms so that the country can stabilize itself and remain in the euro? Because the question is not whether Greece wants or not to be in the euro – 80% of the people say they want the common currency – but whether it can and wants to do what it takes to reform its economy and society so that it will be able to stay in the Eurozone.

For the Eurozone as a whole, the situation is more complicated: either it will develop the political structures that justify and support a common currency, or, I am afraid, the whole euro experiment will fail. There will be many more turning points along the way. But whatever happens will not depend on the Greek election.

 

The Greek political leadership is already talking about the need to agree to form a government, this time: Do you expect for them to make more concessions than the last time, if neither of the main parties gets the majority to form government by itself?

 

ANDRIANOPOULOS: The pressure to form a government following the election will be immense because the country is at the edge of the precipice and no one will want to shoulder the responsibility of a collapse. However, within this framework, there will be a lot of maneuvering, depending, of course, on the actual results of the vote. It is nevertheless my conviction that stability would depend upon the polling results of the Democratic Left party. If they emerge strong they can play the catalyst for either a more conservative or a more leftist government.

 

In Greece, the conservatives, the socialists and the far-left, they are all saying they don’t want to quit the Euro. But if the far-left wins and, as promised, implements anti austerity measures Athens will be forced to quit the common currency. How probable is a victory of Syriza and how probable is that they finally take the anti-austerity measures that will make the country leave the Euro?

 

ANDRIANOPOULOS: All parties, with the exception of the orthodox communists, say that they want to keep Greece in the euro. But parties like the far-leftist Syriza, which is expected to poll first or second on Sunday, qualify their position by saying that they do not want to keep Greece in the euro AT ALL COSTS, which introduces an element of uncertainty that has serious implications on the confidence of investors and bank depositors. My view is that Syriza will not attempt something so radical that will lead to an exit from the euro. That would be particularly unlikely if Syriza is forced to govern with a coalition partner like the Democratic Left party (DIMAR), which is solidly pro-European. A forced cohabitation with DIMAR, will give Syriza the excuse it will need in order to abandon its more radical positions. I think, as I mentioned previously, there’s a lot riding on a good showing by DIMAR in the polls.

On the other hand, if the conservatives of New Democracy win and a government is formed around them without Syriza participation, I foresee a lot of difficulties ahead. A strong but frustrated Syriza will find it very tempting to adopt a scorched-earth style of opposition, seriously hampering reforms and rendering the country ungovernable. Unless, of course, ND forms a government with the head of DIMAR mr. Kouvelis, as its head. That would buy them time and enable them to formulate a platform more acceptable to the people who did not vote for them.

 

At this point, apparently there is broad agreement that it would be worse for Greece to leave the Euro than to maintain it. Do you think that Greece can afford to stay in the Euro zone, under the same conditions?

 
ANDRIANOPOULOS: Under the same conditions, no! In the medium term, if Greece wants to have a hard currency, it has to reform itself economically and socially and adopt behaviors commensurate with the expectations placed on a country with a global currency. Namely, the country’s leadership should opt for more cuts in spending that rely on taxation.

 


When the crisis hit Greece, many blamed the political and social system of the country for the situation, and so Greece was asked to change some parts of it. But after those measures the situation got worse. At this point: how much the political and social culture of Greece is to blame for the crisis, and how much are the measures taken to contain the crisis guilty for making it worse?

 
ANDRIANOPOULOS: The Greek political system - and Greek society – were totally unprepared for the tsunami that hit it. That is why, they had no plan about what to do when the economic crisis knocked at the door, forcing the so-called troika of lenders to impose its own plan. Then they proceeded to do all the wrong things: increase taxation on those who already paid their taxes, reducing small pensions rather than the scandalously high ones, avoid restructuring the corrupt and inefficient public sector passing all the burdens of the adjustment on the already straining but much more productive private sector. 

There is no doubt that the adjustment would be painful (although the Europeans, led by Germany, sought to impose much more pain than what the IMF thought necessary or useful), but the timidity and lack of vision of the former ruling parties made the situation much worse than it had to be. It was not the medicine (the measures) that was wrong, but rather the policies to implement it.

Even now, when all parties talk of “renegotiating” the deal with the country’s lenders, no one has a clear plan about what is to be renegotiated and how.

So, it is easy to blame the memorandum (which was never truly applied), but the real fault lies with the political system and our society that allowed it to stay in power for close to four decades.