Ten questions on Greece & SYRIZA, with ten answers – Q&A with Jorge N. Rodrigues

greece13 image(For the Portuguese language version of this interview, click here. Otherwise read on…)

 

  1. Why had the Eurogroup decided last week to grant a two-month bailout extension until February? This was a political signal for Greeks?

Officially, it was not political but a ‘realistic’ solution since it offers enough time for the “evaluation of Greece’s progress” to be completed but does not extend the ‘agony’ longer than it must. In reality, however, it was a clear message that Berlin is not interested in dealing with Mr Samaras until and unless either he elects a President in this Parliament (in which case a general election is averted) or he wins a general election (following his failure to elect a President in this Parliament). The two months expire precisely when a new government, led by Mr Samaras, or Mr Tsipras is in power. Clearly, Mrs Merkel thinks that Greece’s next agreement requires a freshly elected, or a revived, government. Deep down, the German government knows that it must now lock horns with Mr Tsipras’ SYRIZA. It is quote simple really.

  1. Why Prime Minister Antonis Samaras called, in a surprising move, early presidential elections for December 17?

It is my view that Mr Samaras has been betrayed by Berlin and Frankfurt. He has been promising Greek voters a “clean exit from the bailouts” by the end of December. I refuse to believe that he made this up – and I trust he only made that promise because he was promised such a “clean exit”. In this context, his strategy was to wait until February, when the “clean exit” would be announced with considerable fanfare, and then call an election putting voters in front of a dilemma: A vote for me is a vote for an immediate exit from the bailout nightmare. A vote for SYRIZA is a vote for conflict with the EU that will result in Grexit and chaos. Me or the deluge.

Alas, Berlin’s promise to allow him to claim that he bailout had been exited cleanly was withdrawn a couple of weeks ago. Mr Samaras felt betrayed and his own media and MPs turned against him. He had a stark choice: Wait this thing out, with daily loss of control over his own government, until a Presidential election in Parliament in February, which he would lose thus being forced into an unwinnable election? Or go for it now, in a last ditch attempt to terrorise voters into voting for him rather than for SYRIZA? He opted for the latter.

  1. Did Samaras have other options, or he is completely sandwiched between troika and Opposition and this move was desperate?

His move was desperate because he never considered his one alternative option – the one that resonates with the truth about Greece’s economy and with regard to the Eurozone crisis: the option of telling Germany and Brussels that enough is enough. That the grand lie must end that Greece is on the way to recovery and will escape its bankruptcy if only a few more reforms and a little more austerity are applied.

  1. The probability of snap parliamentary elections in January is high, or there’s a probability for government parties to cobble a final majority of 180 votes to elect Stavros Dimas?

Politically speaking, there is next to no chance that Mr Dimas will secure the 180 votes he needs in the third ballot. Then again, there are other factors. All, or most, of the independents, and some MPs from DIMAR and ANEL (two small opposition parties) stand no chance of re-election. They thus have a vested interest in voting for Mr Dimas so as to prolong their parliamentary career (and assorted ‘benefits’) for a year or so longer. They are Mr Samaras’ only hope.

  1. A major crash of two digits at Athens stock Exchange and contagion in the sovereign bonds Euro zone market yesterday are early signals of financial panic from the investor community?

Yes. Those who had assumed that Mr Samaras was going to be allowed by Mrs Merkel a “clean exit” strategy prior to the Presidential election were dumbfounded. Of course, the smart money had already ‘abandoned ship’ in October…

  1. Can we expect 10-15% yields for Greek bonds and 1000 basis points for CDS and a contagion in the peripheral economies like Portugal, Italy and Spain, from this new Greek crisis?

Greek bond yields and Greece’s stock exchange index do not matter while a new agreement is being negotiated between Greece and the EU. If you are not borrowing, it really does not matter what interest rates are! And, as far as the stock exchange is concerned, we should be interested in prices that reflect the underlying, true values – rather than the bubbles created by governments and the ECB. So, Greece’s priority must be the re-negotiation of its agreement with the EU, accepting in the meantime tumult in the money markets as the price we need to pay for escaping from the ‘extend and pretend’ phase to a phase of genuine stabilization and growth. If this also means that, during our negotiations, Portuguese, Spanish and Italian yields rise, so much the better. For it may mean that Lisbon, Madrid and Rome will be forced to participate creatively in this negotiation, forming a Peripheral front, so as to forge a new Eurozone architecture that stops the asphyxiation of proud nations in the name of inane, unenforceable, misanthropic rules.

  1. Do you think a stable government can emerge from snap elections to conclude the bailout and negotiate the follow up?

Yes, I believe so. Democracy has its ways and should respect the will of the voters. They are, after all, the final arbiters. Not the ECB. Not me. Not you.

  1. A potential Syriza-led government will reject the suggested ESM precautionary credit line?

SYRIZA should reject even one euro of fresh loans until and unless Greece’s public and private sectors are renders solvent again. Greece’s (and Portugal’s) tragedy is not that we were lent too little. It was that we were lent too much in order to throw it into a black hole.

  1. In what sense Syriza can compromise with Brussels and the ECB to avoid market volatility and risk of default?

In a variety of ways! However, SYRIZA will, and ought not, compromise on one thing: Striking a new agreement that lifts the veil of depression over its social economy, over innocent people that are suffering indignity for no reason at all.

  1. In 2015 do you expect Greece to exit the Euro, or a political change inside the Eurozone?

It would be a disaster if Greece were to be forced out of the euro. For Greece and for the euro, and Europe at large. There is no need for that. If the Eurozone cannot survive intact the democratic election of a government that seeks to put an end to its people’s suffering, it is doubtful whether a United Europe is still possible.