Ambrose Evans-Pritchard on Greece and the rise of SYRIZA – from THE TELEGRAPH

Screen Shot 2014-12-10 at 10.55.14 PMIn this powerful, balanced article, published today in conservative UK daily THE TELEGRAPH, Ambrose Evans-Pritchard makes important points on Greece and a prospective SYRIZA administration:

Events have rudely exposed the illusion that the Greek people will submit quietly to a decade of colonial treatment and debt servitude… Greece was sacrificed to buy time for the alliance, like the Spartans at Thermopylae. It was subjected to an unworkable economic experiment, in defiance of known economic science and principles. Europe’s leaders have betrayed their a special duty of care to Greece. They may at last have met their match in the ice-cool Mr Tsipras.

To read the whole article, click here.


  • AEP like many other Britons simply hope that Greece might be able to break the evil EUSSR union before Britain does the same with her own referendum. They secretly hope that Greece might spare them the embarrassment of the UK becoming the cause of the break up.

    The truth is that Syriza will not be allowed to take over Greece. This at least Berlin has made more than clear.

    • And since when have we Greeks deferred to Berlin the decision of who rules our country? Greeks are on the verge of electing a government ready and eager to say ‘No’ to Mrs Merkel. Will you, at long last, support us Dean? For I recall that, last time round (during the 2012 twin general elections), you supported Mrs Merkel uyes-man – a certain mr Samaras? Dean, it is time to come clean.

    • If the Germans had actually supported Samaras, with a genuine bail-out and restructuring of the debt (as opposed to sleight of hand that rescued northern European banks and sent the bill to the Greek people, along with German instructions on how to behave) then it is likely that Syriza would not have the support that it now does. Instead, in the last General Election, the Germans and the European Commission directly threatened Greek voters of the dire consequences if they dared to vote for Tsipras. This external interference in the democratic process of an EU country is unprecedented, unless we go back to the Nazi occupation or the Allied post-war interference in Greece. Will they try the same bully-boy tactics again, should there be a general election in Greece?

      Yet you, Dean, supported the Germans and the whole eurozone mafia, by publicly attacking Syriza on this very blog (and on some others). And I find your attitude to democratic process to be very suspect: “Syriza will not be allowed to take over Greece”, you say. Does that imply, for example, your approval of a military coup, or sending in foreign troops? Or is that comment confined to modern-day warfare, where troops have been replaced by squadrons of dead-eyed accountants? — economic strangulation instead of bombs and machine guns.

    • @Guest(xenos)
      I think Dean has the Greek media, their corrupt owners and the bankers in mind. The ones calling the shots up to now. They are going to implement a full assault on the voting public if general elections are called and possibly work behind the scenes to do anything in their power to see if they can avoid this. The last inteference by Germany and the commission will not be repeated this time I think. Not that they care about their image in Greece, but the situation in Italy, Spain and France is delicate and people there will be watching. Besides they probably want a change in government.

    • Dean, you were always a dissenting opinion in this blog and your opinions were always well articulated. Some I agree with, some I do not. Nevertheless, I do respect all, because they are a product of reason and bona fidae critique. I sense that you cannot get your head around voting the SYRIZA clowns. That makes two of us, but as far as I can see the forthcoming elections pose a clear dilemma for all Greeks, and it goes like this :
      IF you believe that the current economic policy as implemented on the ground by the incumbent government will produce growth (the formal assumption is around 3% in 2015) and prosperity to the whole populace and enable Greece to pay its loans to the cent, THEN vote ND and/or PASOK. IF NO THEN proceed to the following question;
      “Do you believe that in order to have any hope of growth, some kind of debt forgiveness is in order?” IF NO then vote something like POTAMI. IF YES proceed to the following question
      “Do you believe that in order to have effective negotiations with the likes of Merckel Greece will have to put at stake its Euro membership, even though the exit will be harsh and ill designed (as it is always the case with Greek political incompetency)” IF Yes vote for SYRIZA. IF NO, my friend you are a dreamer…

    • Xenos: I never supported not I will ever support Germany in anything. I am merely making an observation based on empirical evidence. The EU did not allow a Papandreou referendum and you think that they will allow a Syriza government? Why would they do such thing? It goes against everything we know about Berlin.

    • Yiani,

      Greece badly needs an honest middle of the road politician to stand for the country’s interests. Instead it is getting a far left politician that has been behind the labor syndicates and the youth movements at the universities (main reason for the permanent chaos there).

      Tsipras simply won the lottery with Samaras’s over taxation policies and with Merkel’s total insistence on punishing Greece through over taxation.

  • “we will liberalize the labour market”…I hope professor you were quoted out of context or that the people in Syriza’s shadow labour ministry do not share your views. The situation in Greece’s labour market are horrible as employers are having way too much power over employees, using the sky high unemployment rate as leverage. People are often employed in the shadow economy, without official standing and health benefits, and being at the mercy of their employers are often paid small sums instead of a full wage or 9-10 wages per year instead of 12. Entire businesses are able to survive in this manner in a zombified state crushed between high taxes and social security obligations and declining profits. They often turn on their own workforce using part of their wages as capital. This situation as one can imagine has hurt competition across all markets. In every segment of Greece’s economy zombified companies are competing with viable healthy ones for the same market share. Instead of further deregulation that would prolong this situation more regulation is necessary that would even the stakes. This regulation should also be strictly enforced. In Greece only just yesterday we were exposed to the case of the head of the primary social security agency (IKA) being charged with negligence over his holding back the confiscation of funds of a supermarket chain. His excuse was that he did so in order to save jobs in the company even though his actions have cost IKA its money. This is unacceptable. If a company is not viable and can only stand on its feet by withholding payments from social security and its workforce it should go under and its market share and part of its workforce be assimilated by companies who are. Politicians are afraid of the temporary spike in unemployment that the de-zombification of our markets would undoubtedly cause but they are only making matters worse and are postponing the inevitable. I hope that this is the case as well if Syriza has further deregulation in mind, I hate to think of other alternatives such as that they have decided to use our workforce and its future as a bargaining chip in their negotiations siding once more with our inefficient but politically loyal civil servants in another exhibition of statist mentality or even worse that they are simply oblivious to the dire situation in the labour market.

    • Truly to liberalise the labour market we need to emancipate workers from the fear of not being able to put food on the table for their families. Yes, we believe that firms must have flexible labour arrangements. But labour markets cannot be free unless labour is also free from indignity and want. Liberty is a concept that we have been deferring to the libertarians for too long. Time to retrieve its meaning!

    • Sounds to me like an arrangement of Renzi-style deregulation. I fail to see how flexible Germany-style mini-jobs making a nominal hike in the minimum wage a joke or the right to hire and fire people on the spot will turn the situation I described around. Measures like that would just award official status to it. Zombie companies that are now unofficially putting their workforce in a part-time pay arrangement will make the matter official and that is that. Nothing will improve and there will be further deterioration due to the deflation effects of these low-paying jobs. Part time jobs will be the new normal and labour will be completely commoditized. When a company hires someone they should treat it as an investment and not as something as trivial as buying equipment. In another sense Germany’s mini-jobs scheme was a mistake, it could be classified as wage dumping in the EU area and its significance in Germany’s economic growth during the past decade is I think way overblown and questionable. In any case Greece is not Germany, its labour market and companies have different characteristics and one should not simply copy-paste politics without thinking first. Finally if labour deregulation is in Syriza’s agenda I wonder what is the differentiating factor between them and the euro-corporatists of PASOK/ND? The fact that they are not the ones signing the bills? Syriza needs to make a difference in every case, in every issue if it is to succeed and to be completely open and honest of its policies. If they supported the labour deregulation that occurred under the troika management of the past four years they should have put their parliamentary votes where their mouths were and let us know.

  • I really hope “enough is enough” will really be spoken out in Europe. But I fear, that for this task, a new government is far too weak a voice. You really need a wide front of intellectuals saying “enough is enough”, telling the true story, engaging in debates with those who have been spreading the myths of the lazy and corrupt Greeks to this day, in Germany and in fact even in nations like Slovakia. It won’t be easy and it sure will be hard work.

    • Somebody has to start the process though of saying no. Italy, France, Spain have similar or greater anti-austerity numbers – it is a case of which card in the house of cards falls first.

      Meanwhile Greece was not considered too small / weak / unimportant to “start” the crisis….

    • The one thing we HAVE had, and for years now, is a broad front of intellectuals from all over the world providing cogent and convincing arguments that the EU’s “crisis solutions” would only lead to disaster. Which it did. And what was the Eurogroup, EU and ECB’s reaction to this advice? NADA. It was a case of ‘water off a duck’s back’ : completely ignored / unheard. It DID however serve to educate the public: much more important!

      The one thing Europe needs now is for its voters to stand up and say NO.

  • I note that we are back to comments like “Greece leaving the Eurozone” or “Greece getting kicked out of the Eurozone”. If I recall correctly, the treaties do not foresee a “leaving” nor a “kicking out”. Is the idea that we simply ignore treaties and legalities and establish new facts? If I am correctly informed, Greece couldn’t even introduce a parallel currency under the treaties, something which has always struck me as an interesting idea.

    • Do the treaties have a provision on the ECB blackmailing governments, threatening to leave the banks short on cash unless they do its bidding? That struck me as an interesting idea..

    • @Klaus: it seems that the EU has made no progress at all on the situation with eurozone membership and treaty obligation. As I understand it, the implicit German threat is as you say. As you will recall, the European Commission position has always been that Greece would have to quit the EU in order to quit the eurozone. I find this bureaucratic nonsense to be absurd, and I suspect that the Court of Justice would concur. The logical policy would be that Greece could choose to exit, with the agreement of all other eurozone countries.

      @Tasos: You raise a very important legal and practical point. I do not think that the CJEU could accept the legality of the ECB acting outside of its remit in order to force a country to exit the eurozone. The issue therefore hinges on the constitution of the ECB and what it is mandated to do (and not to do). This requires specialised legal expertise for a serious commentary. Ultimately, it would probably hinge on Greece’s acquiescence behind the scenes (a la Papandreou) or a very bitter political-legal fight which would require a lot of political allies across Europe. Given the preponderance of right wing governments at the moment, I suppose Syriza has few allies…

    • The treaties are bent to read whatever the political class of the day what them to say. I agree with Ambrose that Greece should have left the Euro when the crisis started, and actually as I have never tired of saying she should never have joined the stupid Euro in the first place.

    • Dear Mr. Kastner,

      In case your memory doesn’t help you, i would like to remind you what happened to Cyprus and why the cypriot politicians had to step back because the alternative was to print the cypriot lira. I would also like to remind you, how many times the treaties have been violated (starting with the no-bail out clause, continuing with the IMF’s statute on not giving loan to countries that their debt isn’t viable). The rules Mr. Kastner, in this world, are made by those with power to serve their interests and they can interpret them as they please. I would also like to remind you, that in two (2) Eurogroups, the European heads of state, have signed that upon confirmation of a greek primary surplus by the Eurostat, a discussion for further debt relief would open. It just shows you what’s their signature is worth. Samaras is weeping over his political career for believing them.

      I would also like to remind you, Timothy Geithner’s meeting with Schauble in the Baltic.

      There were also various direct threats by various EU politicians, in the last national elections and i am sure that this time won’t be an exception either. Once you are FORCED to print national currency Mr. Kastner, i am sure that Mr. Schauble will be all too willing to find ways to interpret the treaties to allow for any new legal regime.

    • And sure enough, it has begun…

      “I think that the Greeks – who have a very difficult life – know very well what a wrong election result would mean for Greece and the eurozone,” Juncker said during an Austrian public tv debate with EUobserver and several other Brussels-based journalists.

    • As a formal matter, the interpretation that, an event or action not foreseen by treaty or law is implicitly “forbidden”, is false. As a principle, it is unworkable and I would add, unethical.

      Case in point: the ECB’s mandate is “price stability”. However, Mr. Draghi clearly stated the other day in Helsinki, in blunt violation of the ECB’s primary mandate, that the “adjustment mechanism” to economic shocks, will be deflation. So, Mr Draghi, scraps his primary mandate in favour of his secondary one (to promote the broad policies of the EU council–currently, austerity), because… TINA. This strikes me as an interesting idea.

      Final point: what is to be done when said treaty contains self-contradictory or unattainable provisions? Who decides on which of the clauses to keep and which to scrap? Nobody (under the treaty) has this power…

    • While I agree with Andy that treaties are not set in stone, far from it, the E.U. needs the people to believe in them to keep democratic appearances. This is why I always found a legal avenue against the actions of the ECB and the eurogroup as a worthwhile option. It seems to me that no matter the outcome and the political landscape in relation to Greece’s government this would be a win-win situation for Greece as well as the people of Europe. Let’s not forget that the timing is good if one considers the inquiry the Irish are conducting in relation to their own ECB blackmail and all the embarrassing details concerning Italy’s soft coup. Any country that would choose to pursue this avenue doesn’t necessarily need to outright win it. It can be used as a bargaining chip to up the ante, or to complicate the situation by creating another conflict front.

    • Klaus, as an experienced man you certainly have seen situations where the facts disregarded all contractual obligations?

      If a new Greek government declares bankrupt and return to Drachma, that creates facts which the rest of the world will have to live with?

    • @ Klaus – you are correct, there is no such provision although there IS a provision for countries choosing to opt out. But so many EU “rules” and laws have been bent & broken by the powerful that rules / law have become meaningless….

  • Dear Prof.,
    In answer to a previous comment above, you state: “But labour markets cannot be free unless labour is also free from indignity and want.”
    At which level of consumption is someone free from want?
    Does it mean that SYRIZA intends to liberalize the labour market, but will defer to do so, until such point as labor unions claim to be “free from indignity and want”? How long do you think before this may happen?

    Best regards.

    • Hi,
      Its an interesting question MB, I suspect that my parameters for “Freedom from Indignity & Want” would be different from yours as well as Prof Varoufakis’s. Maybe a social scientist who has studied this notion can contribute a useful comment. But we all know that humanity lives on a finite planet where food, water, clean air & clean soil are becoming harder & harder to find – as well as biodiversity which sustains us physically as well as psychologically. As far as iam concerned none of the global elites / technocrats are working on addressing these issues & to use Yanis’s words…”The elites & many of us are extending & pretending”…that’s magical thinking to me am as an adult I don’t believe in magic any more.

    • I beg to differ. Where is the evidence that resources are becoming scarcer? “We all know” is not an argument, lest the earth is still considered “obviously flat.” 🙂

      The planet is indeed finite if you ignore science, technology and the capacity for information processing. However, it does not take the same amount of resources to communicate between NY and London today (Giga- or Terrabyte per second communication) as 50 years ago (hundreds of tons of copper wire for 1 phone call at a time, equivalent to 10kbits or so). Access to antibiotics and medical information today provides better health care today -for the poorest person on the planet- than what King Louis XIV himself had in his time.

      If you take a look at the data, it turns out food and clean water are not becoming scarcer, but increasingly available. The “bottom-10%” of the population had no access to clean water 100 years ago compared to today, nor food. Today, obesity is a poverty-related condition.

      To go back to my topic, a “bottom-10%” person of the last century would be free from indignity and want as a “bottom-10%” person today. The problem is that “want” is a feeling that we have evolved to feel, all people have it. People will feel indignity and want as long as other people have more stuff; sometimes even if not!

      That’s why I question the threshold of “Freedom from Indignity and Want” as not well defined and I asked for a clarification in precise terms. Because “Indignity and Want” is a given and is always going to be, like the feelings of unhappiness, or sadness.

  • Thank you for posting this article — Greece long ago needed a fair shake, but it did not get one. Debt restructuring will take place, sooner or later, inside or outside of the EMU.

  • Mr. Kokkonidis,
    The Pasok party is irrelevant today unless they do something major.
    Samaras’s ND is in retirement mode simply as a result of their attempt to overtax the masses.
    Explain to me how over taxation can lead to sustained +3% growth.
    Potami is largely irrelevant, here today gone tomorrow.
    Syriza is the beneficiary of the mistakes of the major parties, but is far from being a mature party ready to govern.
    Maybe there should be no elections now, rather elect a president and proceed to have a cross-party government until the time is right for elections.

    • A cross-party government = More of the Same: continued disaster.

      As for To Potami, for me a coalition instigated media invention (pro-Atlantic, pro-bailout with tweaks, sitting in the SocDem section of the Euro parliament alongside PASOK under Martin Schultz) I am not so blithe. Attracting the ‘pox on all your parties’ vote, they are polling well for a party without a platform. A spoiler party that I believe was invented to join the ND coalition in case of PASOK failure….

    • Well it is obvious to me that there will not be ANY growth if we stay the troika course.
      It is also abundantly clear (see PSI 1&2) that the Samaras – Venizelos duet are not the toughest of negotiators to say the least… The most important argument for voting SYRIZA is that the Greek debt cannot be repaid and there will never ever be any hope of real growth if firstly this is not dealt with… Prof Varufakis rightly argues that point.
      Sadly here the pro SYRIZA arguments stop. You see during the crisis misfortune, Greece had the opportunity to reform. By “reform”, I do not necessarily mean the neoliberal recipe, to sell all national assets at fire sale prices, but the reformation of its administrative mechanism, i.e. tax offices-procedures, courts, land registry, prefectural and municipal bureaucracy and evaluation of its public servants in order to make little investments and startups possible …
      This has not happened simply because the major political clientele of ND and PASOK had been public servants, the Greek Establishment of privateers, bankers, media barons which are state fed via public contracts and never assumed any business risk (not least with their money). Some of the above have already metastasized in the SYRIZA camp, as the silent and disorganized masses are now desperate enough not to be influenced by the fear factor argument of a SYRIZA government. SYRIZA now is an opportunity flag for them and a viable or not so scary option for the masses. And now as the scales tip, the Greek populace and the electorate is ready for the game theory equivalent of a “Messolonghi Exodus”, that is certain death if we stay the course and infinitesimal chance of hope if we run for the hills…

    • I agree: SYRIZA must avoid becoming a flag of convenience for those resisting change. It is a tough ask. But SYRIZA remains the only vehicle for possibly bringing about change. Or so think/hope.

  • No, sorry, Greece doesn’t need an honest middle-of-the-road politician. Not in the least. It needs a politician who will say no and, in fact, dare the ECB, the EU, the Commission, Merkel and Schauble et al to “do what you have to do, and get on with it, while you’re at it”. Enough with the threats and the accommodations. If for no other reason, then for the general principle of NEVER EVER capitulating to Germans and Germany. EVER!

  • “ice-cool Mr Tsipras”? Refreshing, even though in the middle of winter. Anyway, Pritchard’s stats and numbers are correct and so is view about the situation in Greece. Still, I am very suspicious about his motives. It seems to me that, when the EMU will be finished and the influence of Germany will be pushed back behind the Rhine, the brokers at the city of London will shout “Hip hip hooray” three times…

    • I don’t share your worries about motive. AEP’s message has been 100% consistent on Greece since 2009.

  • Yasou people–I lived in Greece. One solution to all this mess is to simply emigrate, after moving your money out. I’m now in the Philippines and it’s nice here, dirt cheap. When and if Greece defaults on the euro and reintroduces the drachma you can reinvest in Greece at firesale prices. What’s wrong with my logic?

  • Dear Yanni,

    Holiday wishes. I really appreciate your enlightened commentary.
    Personally, I do not hold much in terms of hope for whatever Mr. Alexis Tsipras will accomplish. This ‘dim light of hope’ which Europe is pointing at us is not to show a way out. It is merely to check of our vital signs. Feeding off a century old left-wing messianism, our European masters will toss us a half-nibbled bone with perhaps some scraps of meat, flattery and privileges for Mr. Tsipras to stand next to the greats and seal his political future, and to return from negotiations in Samaras’ style with declarations of success. We would have achieved very little, and be fed with the illusion that we have taken back the Thermopylae, and have suffered in fact a Waterloo. At this junction of history, there is no future for Modern Greece in the EU to be anything more than a ‘republic’ of consumers. Greece needs a grassroots movement led by enlightened and innovative Greek intellectuals and policy makers. It needs to rid itself from particracy. It needs a new Constitution. It is suffering an existential crisis, not merely an economic one.