The United States and Europe have nothing to fear from a Syriza government: Our op-ed in the NYT

24/06/2013 by

Today’s New York Times features an op-ed by James Galbraith and myself on the reasons the US and Europe have nothing to fear from a Syriza government in Athens – and a great deal to benefit from. Our own title was “Why a Syriza victory is not against the interests of the United States or Europe”. The NYT chose another title, not to my liking: “Only the Left can save Greece”


Why a Syriza victory is not against the interests of the United States or Europe

By JAMES K. GALBRAITH and YANIS VAROUFAKIS Published: June 23, 2013

ATHENS — THE sudden closure of Greece’s state television and radio network, the Hellenic Broadcasting Corporation, known as ERT, on June 11 has led to a political drama. The network’s journalists and staff have occupied ERT buildings, and large crowds have gathered to show support. With transmitters dark, broadcasting resumed over the Internet, and soon stations all over Europe picked up the feeds. Overnight, a state-run organization that had long been reviled for corruption and cronyism became the voice of a democratic resistance.

The crisis could also take down the Greek government and bring the left-wing opposition to power. This wouldn’t be a bad thing for Europe or the United States. The policies currently imposed upon Europe’s periphery are worsening the crisis, threatening Europe’s integrity and jeopardizing growth. A Greek government that rejects these self-defeating policies will do more help than harm.

We traveled to Thessaloniki on June 12, the day after ERT was closed, for a scheduled interview at ET3, a local ERT station. Our interview never happened because the channel had ceased broadcasting hours before. But at the offices, we ran into Alexis Tsipras, head of the opposition party Syriza, which narrowly lost Greece’s national election last June. Mr. Tsipras is now running a campaign to reinstate ERT as a potentially independent broadcaster. Having greeted the occupiers, Mr. Tsipras walked with us to a nearby hall for an economic discussion that had acquired, suddenly, an audience of over 2,000 people.

Greece’s prime minister, Antonis Samaras, closed ERT to meet European demands for public-sector cuts. If his coalition partners don’t fall in line, there will be new elections in which they will be destroyed. But Mr. Samaras may have overreached.

Despite its flaws, ERT is the only mass forum for public discourse that Greeks have; closing it took all noncommercial political discourse and local news off the air. Now, the government has turned a murky debate over austerity, confidence and credit markets into an open fight over democracy and national independence. In that fight, Syriza stands as the alternative, and Mr. Tsipras now has a chance of becoming prime minister.

If he succeeds, nothing vital would change for the United States. Syriza doesn’t intend to leave NATO or close American military bases. Of course, American complicity in the Greek dictatorship of 1967 to 1974 hasn’t been forgotten, and any Greek government will naturally disagree with the United States, to a degree, over the Middle East. But the fact is, Greece’s problem today is with Europe, and Mr. Tsipras doesn’t want to pick a fight with Washington.

The global financial sector would view a Syriza victory with horror. But banks and hedge funds know that most Greek debt is held by European taxpayers and by the European Central Bank, and what’s left is being snapped up by investors because they know it will be paid. Big Finance is worried about what may happen elsewhere if a left-wing party wins in Greece. This instinct is natural for bankers. But for the American government to adopt the same fear-driven stance would be strategically shortsighted.

Indeed, right now, Syriza may be Europe’s best hope. Greeks neither want to leave the euro nor see the euro zone disintegrate, an eventuality likely to bring down the European Union. They also know that Europe’s approach to the crisis, involving increasingly harsh austerity and larger loans, has failed miserably.

If these policies don’t change, the total collapse of the Greek economy is imminent. The basic requirements for reform could be met within existing European treaties. They include a mutualization of servicing sovereign debt to be mediated by the E.C.B.; restructuring of the European banks by a European Stability Mechanism turned into a kind of European equivalent of America’s post-crisis Troubled Asset Relief Program; an investment and jobs program; and a Europe-wide initiative to meet the social and human crisis by strengthening unemployment insurance, basic pensions, deposit insurance and core public institutions like education and health.

Syriza plans to fight both rising hunger and a xenophobic neo-Nazi party, Golden Dawn, with school lunches and food stamps. A Syriza government would seek these reforms and the salvation of the European project. And this can be only a good thing for the United States.

An unlikely campaign to change the flawed policies that govern the European Union has begun in Greece, a small, proud country that has, in the past, given quite a few ideas to the world — including one, people’s government, that we like to call by its Greek name.

James K. Galbraith and Yanis Varoufakis are professors at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.

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