Greece, the IMF and the European powers

At first sight, an editorial on this topic may seem somewhat far flung, and not of great relevance to ourselves and other countries in Caricom. But the issue, over the last few weeks, of Greece’s confrontation with the European Union and the International Monetary Fund, as that country has been searching for funds to keep its economy afloat, will have a ring of familiarity to citizens of Caricom, and would induce an interest in affairs so far away, that would, on the face of it, have seemed unmerited.

But the picture of a relatively new political party finding itself in the seat of power with extremely difficult economic circumstances confronting it, will not be unfamiliar to the people of our region. To take one case, for example, Jamaica in the north still struggles to maintain what might seem to some an extremely long period (since the mid-1970s) implementing an economic recovery programme with the IMF. And, it might be recalled, the institution was widely thought then, to be acting substantially as an agent of the Western powers, the use of whose resources it negotiates with countries in desperate economic circumstances.

And nearer to the present in the Caribbean, many will have been observing the present struggle of the Government of Barbados to implement an IMF programme, though without the public and highly political resistance demonstrated in Jamaica in earlier times.

The curious interest that we, in this part of the world have, will obviously be elicited by the moving picture of resistance which the new government of the Syriza party of Greece has been trying to put up as the IMF, with the strong support of the EU, insists that there can be no other way for Greece to proceed but to implement a certain number of familiar measures. These are seen, in the halls of European governments, as the price not only for Greece’s economic recovery, but for adhering to what is accepted in the EU itself as a set of necessary measures to be undertaken. And this is so regardless of the government’s asserted legitimacy as having been recently elected almost specifically with a mandate to find an alternative, or certainly a less financially challenging, path.

The news this week appears to be that, in spite of the apparently quite differing views of Greece from the other two parties − the IMF and the EU – a desperate effort is now seeming to be made, within the limits of each party’s mandate, to arrive at a solution to the problem. This scenario would appear to have been precipitated by the parties’ growing realization that no single one will allow its back to be driven against the wall. And for Greece in particular, with such an apparently unceasing prolongation of its confrontation with the other powers staring the government in the face, it would mean the possibility of a return to the polls.

For the EU, a prolongation would perhaps mean a worsening of the ferocity of the Greek government’s supporters at home, in the face of a lack of potential negotiators from alternative parties-governments, whose failure to come to grips with the present situation has been, in large measure, the reason for the presence of the Syriza party in office. But in addition, there seems to be some sense within the EU, that without an agreement with the present government, little prospect of an alternative with a sufficient amount of support within the country, could produce the result that the EU would want.

But in addition, the Syriza government, essentially from parties of the left, has, just as the EU and IMF were apparently beginning to feel that Prime Minister Tsipras and Minister of Finance Varoufakis, the obviously key figures in the government, were beginning to feel the pressure which those institutions were exerting against them, decided to play a diplomatic hand which was unacceptable, or at least unpalatable, to the international institutions. And indeed it would seem that the visit of the Greek Prime Minister, whether productive or not we do not know, to Russia and President Putin, has introduced a diplomatically unpalatable element into the situation.

We cannot, of course, have any substantial sense of what transpired between Putin and Tsipras. But the latter’s initiative must have opened, in the minds of the EU and IMF, the prospect of adding another element of uncertainty in EU-Russian relations, Putin presently holding the view, following events in Ukraine over the last many months, that there is a resistance on the part of the EU to any indication that Russia has a part to play in what he may wish to see as the remaking of post-Cold War European relations. And in that connection, it is well to recognize that the present Managing Director of the IMF, Christine Lagarde was, not too long ago, a high French government official, as that country’s Minister of Finance.

In effect, the fact that the Greek government is of the left persuasion, demonstrating, without probably any real belief, that Russia can, in the sense of the medium to long term, be a substantial provider of aid to Greece, has, nevertheless, probably introduced a potential upsetting of the diplomatic equilibrium in the Western European and American mindset, unnecessary at this time. And this in turn imposes an inclination to try once again with the Greeks. For really, neither side would wish the precarious balance of diplomatic or geopolitical forces in Europe as a whole (Greece has been a longstanding member of Nato) to be disturbed.

Of course, none of this is to say that the Greek authorities have any medium-to long-term upper hand in the present situation. What it would seem to be seeking, as a new government, is to ensure that an EU-IMF agreement is of a kind that does not upset its own domestic situation as a new government.

In real terms, Prime Minister Tsipras will be aware that institutions like the IMF function on the basis of precedent – previously negotiated arrangements. In this the organization will be supported by the EU. Yet, with Britain in a situation of threatening Brexit – a departure from the EU − and rumours of Greece doing the same, it is unlikely that European diplomacy will want to create the setting of a situation where Greece, as founding member of the EU, however small, sets any such precedent.

In the difficulties that a country like Jamaica, under Michael Manley and after experienced, this kind of complexity of the current global diplomatic complexity was not present. Today, even with the relative weakness of Russia, backs will be bent well backwards to inhibit disintegration, or precedents for disintegration, in Europe.

Greece will obviously be subject to substantial policy concessions, but not to the limits that faced many developing countries in similar situations during the Cold War.

 

Around the Web

Comments