Thermopylae or Versailles? Greece deal threatens to destroy the European project

Europe, as we know it, appears to be over. 

The promise of a peaceful integration of capitalist equals lies tattered on the floor of a negotiation room in Brussels. There, the SYRIZA-led Greek government finally succumbed to the blackmail, economic carpet-bombing and “mental water-boarding” of the institutions of European capitalism.

The final weeks of the debt negotiations culminating in a cynical political coup against Greece have laid bare the undemocratic, technocratic nature of the European Union (EU), which operates as a thieves’ kitchen to protect vested financial interests at an incalculable human cost.

For many, the brutal humiliation of the Greek government and people heralds the end of the dream that the EU could be softly nudged towards a benevolent economic and political union. For others on both the political far left and far right, it provides further justification for a perspective of exiting the EU to return social and political issues to a primarily national level.

German philosopher Jürgen Habermas, an intellectual figurehead of European integration, told The Guardian on 17 July that the outcome of the negotiations means that the “European Council is effectively declaring itself politically bankrupt”. 

Nobel-prize winning economist Paul Krugman, described the terms of the deal as “madness”, and argued that “[w]hat we’ve learned these past couple of weeks is that being a member of the Eurozone means that the creditors can destroy your economy if you step out of line.”

“This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief … it’s a grotesque betrayal of everything the European project was supposed to stand for,” he said. 

Germany: G7 meets amid mass protests

Schloß Elmau, venue of the G7 summit

Tens of thousands of anti-capitalist, environmental and social justice activists have taken to the streets and the country roads of Bavaria to protest the Group of Seven (G7) nations summit, which took place on June 7 and 8 in a secluded castle in the German Alps.

On June 4, over 35,000 demonstrators marched peacefully in the Bavarian capital Munich, protesting the destructive policies of the G7 industrialised nations – climate change, militarisation and NATO expansion in Europe, economic austerity and poverty, democracy-destroying free trade deals and more. 

Some protesters dressed as clowns, while others wore black or even traditional Bavarian lederhosen, and carried rainbow flags and banners bearing slogans such as “Stop the G7 now!”, "G7 go to hell" and “Revolution is the solution”.  

On June 8, another 8,000 protesters marched through the alpine resort town of Garmisch-Partenkirchen, a few hours south of Munich, in the shadow of Germany’s highest mountain, Zugspitze. 

The meeting between the leaders of the G7 nations – the United States, Britain, Canada, Italy, France, Japan and Germany – was held nearby at Schloss Elmau, a picturesque castle converted into a luxury hotel, at a cost of approximately US$350 million.

Over 22,000 police were deployed to protect the summit – the largest police operation in Bavarian history – and 17 kilometres of temporary fenceline was erected to keep protesters out.

Greece: Syriza wins loan extension, but with strings attached

Alexis Tsipras celebrating SYRIZA's victory, January 25

On February 23, Greece’s new left-wing SYRIZA government submitted its list of proposed economic reforms to its international creditors as a precondition for the approval of a four-month loan extension tentatively agreed to on February 20.

With Greece’s existing loan arrangement expiring on 28 February and bankruptcy looming, a last minute deal was finally agreed after three weeks of intense negotiations that were characterised by daily – sometimes hourly – twists and turns, claims and counterclaims, leaks and threats.

For SYRIZA, elected on January 25 on a wave of hope and a fierce rejection of the crippling austerity measures that have been imposed on Greece in return for economic “bail-out” programs by the “Troika” – the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Union (EU) – the new arrangement represents a significant compromise.

Any discussion of debt write-offs, “hair-cuts” or renegotiation has been postponed until the next round of negotiations at least, and funds earmarked for bank recapitalisation will have to be used for that purpose, rather than redirected towards meeting Greece’s desperate social need.

Greece no longer has to accept the unilateral diktats of the Troika and is able instead to negotiate with each body separately. But the new funding comes with conditions, including close oversight by those same bodies, now referred to as “the institutions”, and restrictions on how the money can be utilised.

Importantly, the SYRIZA government has been required to refrain from any “rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.”

While less than specific, this restriction likely includes any privatisations already completed, as well as those currently underway (although Greek law allows the government to change the terms of sale). 

Depending on the "assessment" of the institutions, this may also impact on measures promised by SYRIZA to improve social welfare, such as raising the minimum wage and the restoration of collective bargaining and other workplace rights.