STOCK MARKET WATCH -- Thursday, 16 July 2015

[Demeter]

1. Tsipras should now try to create time and breathing space to lead Greece out of the European Union

http://www.telesurtv.net/english/opinion/Greece-and-the-Union-of-Bullies-20150714-0017.html

The FT reports how, having reached an impasse in their negotiation, around 6 a.m., Merkel and Tsipras went to leave the room and President of the European Council Donald Tusk physically prevented them, saying “there is no way you are leaving this room”...Alone, sleepless, with other leaders reportedly taking turns on him in a process which one EU official described as “extensive mental waterboarding”, looking like “a beaten dog”, Tsipras finally succumbed. In any ordinary circumstances, in most legal jurisdictions, such an agreement would be considered void; obtained by coercion and under duress. In Euroland, it seems, such considerations do not apply.

Within the hard black and white reality of fat-lettered newspaper headlines, of adoration and condemnation, of twitter’s one-hundred-and-forty characters, everything is binary. Alexis Tsipras must be either praised as hero or condemned as villain; idolized as the Messiah or reviled as Judas. As I have written previously he is neither. He is just a man under an enormous amount of pressure, trying to reconcile a Greek mandate – to do away with austerity, but remain within the eurozone – which turned out to be irreconcilable. Much more cogent is the charge that Syriza should have known that such a promise was undeliverable when they made it. I do not subscribe to the view that this was done deliberately. That they inflated the hopes of a people, already betrayed so many times, intending to betray them again. Nothing in their behavior these last six months evidences that. On the contrary, time after time, I saw a government totally shocked by the behaviour of people who were meant to be our family, our friends and allies.

I saw in their eyes the look of someone stunned by an abusive partner. The very commentators claiming that this behavior was completely predictable also claim they have never seen anything like it and that Europe has changed fundamentally. Nevertheless, this cruelty is now a matter of record. We had all hoped for a Greek Spring. Instead, we got a German Winter. Yet, everyone has turned on the victim of this violent assault for not locking their door, for wearing too short a skirt, for not fighting back harder, while the criticism of the perpetrator seems to have dissipated.

The idea of Tsipras as a "traitor" relies heavily on a cynical misinterpretation of the referendum last week. "OXI", the critics would have you believe, was "no" to any sort of deal; an authorization to disorderly Grexit. It was nothing of the sort. In speech after speech Tsipras said again and again that he needed a strong "OXI" to use as a negotiating weapon in order to achieve a better deal. Now, you may think he didn't achieve a better deal - that may be a fair criticism - but to suggest the referendum authorized Grexit is deeply disingenuous. And what about the 38% that voted "NAI"? Was Tsipras not there representing those people, too?

Fear not. The deal may prove unworkable anyway. It may not be passed by Greek Parliament. Syriza might tear itself apart from within. Expulsion from the Euro may be forced by those who have been trying to make it happen for years now, both within and outside Greece’s borders. Then we may get to assess what this other outcome, of violent Grexit and disorderly default, looks like. A constant strand of criticism which has surfaced clearly in the last couple of days is that which claims Tsipras should have had a Plan B, should have prepared for an alternative currency, for the Drachma. This is fanciful. First, it ignores the fact that Tsipras had no such mandate. Public opinion in Greece had been consistently, doggedly and emotionally attached to the Euro. Any attempt to make advanced contingency planning for such an event would have undoubtedly made things worse in multiple ways. A hostile media, both within Greece and internationally, would present this as evidence that the Greek government was not serious about negotiation, but had always planned to lead Greece to Grexit. They did so, to a large extent, anyway – the thrust of the “yes” vote in the referendum was to suggest that a “no” meant leaving the Euro.

The slightest move to organise and print an alternative currency, to stockpile supplies, to practically take the necessary steps, would be interpreted as an act of aggression. The narrative of Greece being blackmailed by Europe would have instantly flipped to one of Greece being the blackmailer. The government would have fallen within days. It is completely legitimate to say that the Tsipras government went into negotiations far too naively. Even that, however, was down to the right sorts of reasons. I cannot condemn Syriza for having believed that the European Union was what it claimed to be: a partnership of equals, within which democracy mattered, sovereignty was pooled consensually and steps to come closer were irrevocable. In one horrific night, Germany and its allies within the Eurozone demolished that illusion. They asserted their dominion, wrested sovereignty by coercion and under threat of revoking Greece’s status.

As Fintan O’Toole wrote in the Irish Times, there was another, unspoken condition: “that Germany would restrain itself, accepting, in return for the immense gift of a new beginning that its fellow European countries had given it, that it must refrain from ever trying to be top dog again.” Many believe that this, too, has been totally trashed. How will this play out, I wonder, in the context of the upcoming in-out UK referendum? Badly, I would venture.

We now know what this new European Union looks like. Spain’s Podemos can adjust its offering to the electorate, accordingly. Be upfront about the possibility of exiting the currency. Go into their negotiations with eyes open. In Greece too, from hundreds of conversations over the last few days, I have the impression that public opinion has shifted significantly. Tsipras now can try to create the time and breathing space, away from the glare of the negotiation, to argue, to convince, to plan, to print. And to lead Greece out of this Union of Bullies.

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