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Business News/ News / World/  Greek polls lay bare a divide in Europe
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Greek polls lay bare a divide in Europe

Beneath the hotly debated arguments over austerity lies a deeper conflict of democratic wills

Greece’s newly sworn-in prime minister, Alexis Tsipras, declared Syriza’s victory the death knell for austerity. Photo: BloombergPremium
Greece’s newly sworn-in prime minister, Alexis Tsipras, declared Syriza’s victory the death knell for austerity. Photo: Bloomberg

Brussels: The Greek election not only strengthened opponents of austerity, it also highlighted a fundamental tension at the heart of Europe’s six-decade-long push to forge a closer union of democratic states: What to do when voters in different countries have different, even opposite, demands.

The victory of Syriza, a left-wing party that has vowed to renegotiate Greece’s debt, was cheered by anti-establishment politicians left and right across Europe as proof that Brussels, at the urging of Germany, has gone too far in pushing spending cuts that impoverish citizens.

Yet beneath the arguments over austerity lies a deeper conflict of democratic wills, between the verdict of voters in Greece, who are desperate for some relief, and those in Germany, Finland and the Netherlands, who do not want their taxes used to write a blank check for countries that get into financial trouble. “Ultimately, this is a clash of democracies rather than a clash of ideas," said Mats Persson, director of Open Europe, a research organization in London. “Voters in Germany and Greece want very different things."

More than that, he added: “Germans and Greeks have fundamentally different views on how to run an economy. The Greek vote will force a rethink to some extent in northern Europe, and Germany may agree to some loosening of terms, but it won’t fundamentally change its approach."

Indeed, while Greece’s newly sworn-in prime minister, Alexis Tsipras, declared Syriza’s victory the death knell for austerity, Peter Altmaier, chief of staff of Angela Merkel’s chancellery, ruled out any sharp shift in policy. “We have pursued a policy which works in many European countries, and we will stick to it in the future," he told reporters on Monday in Berlin.

In a first test of how the European Union will deal with the political earthquake in Athens, finance ministers of the eurozone, the 19-nation bloc that uses Europe’s common currency, gathered in Brussels late on Monday for a previously scheduled meeting.

They made no concrete decisions on Greece but pledged to begin negotiations with the new government in Athens, whose dominant party, Syriza, made a softening of terms imposed by creditors a central part of its election campaign.

“We are democracies," Pierre Moscovici, the bloc’s economic policy chief, said at a news conference after the finance ministers’ meeting. “When the people vote, we can’t ignore that vote. There shouldn’t be a division, either a geographical or ideological one."

But in a sign of just how divided opinion is between Germany and Greece, the German newspaper Bild responded to the Greek election by asking how many extra billions the Greeks would cost German taxpayers.

Angela Merkel, the German chancellor and Europe’s most powerful voice in economic policy, has bristled at her image as an unbending pro-austerity scold, asking the World Economic Forum in Davos last week “not to conduct discussions in black-and-white terms."

“Often, so-called austerity is pitted against the model of growth and investment," she said. “I think that is completely false." All the same, Merkel has been unswerving in demanding from European neighbours steps that cut public spending and introduce budgetary discipline. In Berlin’s view, injecting more cash into Europe’s economy without first securing tighter budgets risks allowing debtor nations to avoid or postpone financial reckonings.

This stern approach enjoys wide support among German voters, even those who vote for Merkel’s rivals.

The centre-left Social Democratic party, with which the center-right Merkel governs in a “grand coalition," for example, has shown no inclination to cut its political allies governing in Italy or France any slack in meeting EU budget limits or missing other targets.

“The Greeks have the right to elect whomever they want; we have the right to no longer finance Greek debt," Hans-Peter Friedrich, a senior member of Merkel’s conservative bloc, said Monday, according to Bild. “The Greeks must now pay the consequences and cannot saddle German taxpayers with them."

The outcome of the Greek election provided a second blow to Merkel’s economic prescriptions, coming on the heels of an announcement last week by the European Central Bank that it would buy up €60 billion ($67 billion) worth of government bonds, starting in March, in the hopes of spurring growth.

Mario Draghi, the president of the bank, had been slowly building support for this policy since a meeting of bankers in August in Jackson Hole, Wyoming, and he visited Merkel in Berlin eight days before last Thursday’s announcement, apparently for consultations.

But Merkel had long opposed a loosening of monetary policy and government spending for stimulus, and her opponents regarded the bank’s announcement as a defeat for her tough line on debt.

Tasked with adjudicating between the irreconcilable positions of voters in Greece and those in northern Europe is the European Commission, the Brussels-based executive arm of the EU and a frequent target of attacks by Syriza and anti-establishment parties across Europe on both the left and the right.

Before the Greek election, Jean-Claude Juncker, the president of the European Commission, spoke against the dangers of a “wrong result" and seemed to endorse the incumbent prime minister, Antonis Samaras, saying he would like to see “familiar faces" win.

His spokesman, Margaritis Schinas, on Monday sought to repair the damage.

Asked at a news conference in Brussels whether Juncker would apologize to the winner, Tsipras, the spokesman noted that Juncker had known Tsipras for some time and said that “there is ample room for interpretation of what a familiar face is."

©2015/The New York Times

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Published: 28 Jan 2015, 01:07 AM IST
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