Thursday, February 19, 2015

Stubborn but not almighty

By Costas Iordanidis

The Greek government has been perceived by many, rightly or wrongly, as slightly mad and irrational, a variable that upsets the status quo set by Berlin when the euro was introduced, based on Bundesbank directives and Germany’s traumatic past.

Thirteen years have gone by since January 1, 2002, when the euro first began circulating. Much has changed since that day and the economic haven heralded by the arrival of the common European currency failed to materialize. Nevertheless, German Finance Minister Wolfgang Schaeuble, who appears unaffected by developments across Europe, continues to defend a bygone world order, as though nothing has changed over the last few years. This survival tactic dates from past exercises of power and influence over his European counterparts.

Needless to say, only a government of young, impetuous politicians, lacking prior experience and elevating to almost metaphysical levels the “people’s mandate,” would dare a head-on confrontation with the European establishment.

The Greek administration is showing flexibility and Schaeuble is being unyielding. The German finance minister is stubborn but he is not that powerful. The first official to challenge Berlin’s omnipotence was the head of the European Central Bank, Mario Draghi, when he introduced quantitative easing, in other words, allowing Eurozone countries access to cash supplies. A second indirect challenge of Schaeuble’s total control over the Euro group was the mediating “Moscovici proposal,” concluded along with the “institutions” – the IMF, the ECB and the Commission, in other words, the troika.

The proposal was approved as a basis for negotiation by Alexis Tsipras’s government but was withdrawn a few minutes before the meeting. This confirmed Schaeuble’s power. What was most absurd, however, was a statement by German Chancellor Angela Merkel’s spokesman supporting the country’s finance minister and the incomprehensible clarification that Schaeuble expresses Germany’s economic policy. As if the contrary could ever be true.

Schaeuble has our sympathy but his daily, head-on collision with one of his counterparts, someone who had been elected MP for the very first time only a few days ago, was a mistake in that it promoted Yanis Varoufakis to his equal on the international level.

There is a force of inertia that dogs the European Union and it’s called consensus. If talks don’t work out Greece will face disaster through bankruptcy but responsibility for the consequences on the euro will lie with Schaeuble, not the completely unknown – politically – until recently, Varoufakis. As for the SYRIZA government, an old Japanese proverb – “God save you from a stubborn old man” – seems appropriate. , Thursday February 19, 2015 (09:04) | Stubborn but not almighty