A revived anti-austerity movement is emerging in Greece with strong international support that is changing the existing narrative of Greece’s position within the eurozone.
Syriza, Greece’s newly elected government, is renegotiating the terms set by its predecessors, avoiding an extension of the previous bailout and renegotiating harsh austerity terms.
Greek Finance Minister, Yanis Varoufakis, has made a proposal for a six-month transition while Greece renegotiates its debt. The proposal would allow Greece to receive more short-term debt, receive the proceeds of ECB holdings of Greek bonds and allow Greece to tap unused bank rescue funds. According to Reuters, “Athens would swap its eurozone loans for GDP-linked bonds and its ECB-held debt for interest-bearing perpetual bonds with no reimbursement date.”
But EU officials have claimed, “the most Greece can expect is further extension of the repayment deadline for eurozone loans, a lower interest rate and perhaps a prolonged moratorium on debt service payments, in return for continued reforms under some form of external supervision.”
Ahead of a meeting with eurozone finance ministers in Brussels, Greek Prime Minister, Alexis Tsipras, said that Greece is committed to implementing reforms but not those imposed externally by others.
This tension between Greece and European financial institutions has been referred to by economist Paul Krugman as a “Game of Chicken.” Krugman writes in the New York Times: “Germany is demanding that Greece keep trying to pay its debts in full by imposing incredibly harsh austerity. The implied threat if Greece refuses is that the central bank will cut off the support it gives to Greek banks.” A Greek banking collapse would pose enormous risks to Europe’s economy and to the European project, “the 60-year effort to build peace and democracy through shared prosperity…and if even one country were to abandon the euro, investors would be put on notice that Europe’s grand currency design is reversible. It’s true that Greece got itself into trouble through irresponsible borrowing (although this irresponsible borrowing wouldn’t have been possible without equally irresponsible lending)…And Greece has paid a terrible price for that irresponsibility.” Krugman has also referred to the economic crisis as “Europe’s Second Great Depression,” claiming that Europe’s recovery is already behind where it was in 1935.
According to Reuters, OECD chief, Angel Gurría appeared to endorse Tsipras’s criticism of the bailout program after their meeting in Athens, saying, “it had produced low growth, high unemployment, rising inequality and a loss of trust.”
Citizens in Greece further expressed their support for Syriza and a policy of anti-austerity in a vote of confidence last Tuesday, February 10. According to Reuters, Alexis Tsipras told parliament that “ ‘little Greece’ was changing Europe by casting off austerity.” Tsipras claimed that Greece is not negotiating the bailout; “it was cancelled by its own failure.” He assured that Greece cannot and would not return to the era of bailouts.
Syriza and its anti-austerity agenda has also inspired transnational support and influence. An Italian blog, Connessioni Precarie, claims “the victory of Syriza is a breach that we should maintain open and enlarge.” There has been an increase in support for Podemos, Spain’s anti-austerity party; a coordination of citizens across Europe with a transnational political agenda against austerity under Blockupy; and the support in media by journalists and academics worldwide. Earlier this month, 300 academics and intellectuals around the world signed an open letter of support for Greece that was published on mediapart.fr, a website founded by, Edwy Plenel, political Journalist and former editor-in-chief of Le Monde.
Now, as Alexis Tsipras and Greek Finance Minister, Yanis Varoufakis, enter a “lion’s den” at Eurogroup meetings in Brussels this week, protesters all around Europe rally for what some have dubbed a “A Breath of Dignity” in support of Greece’s anti-austerity government. According to Protothema, 10,000 protesters were gathered at Syntagma Square in Athens by early Wednesday evening.