Moment of truth

Thu, Jun 14, 2012, 01:00

WHEN GREEK voters again go to the polls on Sunday Europe will hold its breath. To a degree all European elections these days are international events and France’s parliamentary second round this weekend will also be closely watched, but there is a more acute sense that what happens in Athens may well be decisive not only to the country’s membership of the euro but to the euro’s future, the European economy’s future, our future. Greek voters vote in our name.

That uncertainty has over the last couple of weeks had a chilling effect on European markets but also on debate on options inside the EU – no-one wants to offer hostages or false hopes to the Greek electorate either in terms of an easing of the Greek austerity programme or on the broader challenges facing the euro zone. (Taoiseach Enda Kenny seems also to be manifesting a similar – related? – tongue-tied inarticulacy in responding to questions about Ireland’s negotiating position).

In Greece, bank depositors are voting with their feet with up to €800 million in withdrawals every day, while retailers report runs on non-perishable foods such as pasta and canned goods as people stockpile on fears of a post-election involuntary return to the drachma.

The election moratorium on polling makes testing the pulse of the national mood virtually impossible, adding to collective nervousness. The last polls a week ago showed conservative New Democracy only marginally ahead of the anti-bailout leftwing alliance Syriza. However, 80 per cent of the electorate continues to say it wants to remain part of the euro.

“Lest there be any doubt, my movement – Syriza – is committed to keeping Greece in the euro zone,” party leader Alexis Tsipras insisted again yesterday. Just as Irish No campaigners promised us there would be no problem finding a source for a second Irish bailout, the Tsipras brinkmanship has a desperate wishful-thinking quality to it. Like Alice, who claimed “why, sometimes I’ve believed as many as six impossible things before breakfast.” Resigning ally, Nikos Hanias, Syriza’s candidate in Corinth, has warned, however, “you are gambling with our future, betting on the non-existent possibility that our creditors are bluffing without proposing something if the case is the contrary.” Sounds all too familiar.

Tsipras now says that a Syriza government would negotiate a deal with the country’s EU partners rather than repudiate its debts, that the party understands the need to bridge the deficit and is committed to radical tax reform to do so. And there have been some hints from EU officials about giving Greece more time to achieve its fiscal targets, easing the pace of austerity, provided a new government accepts the main conditions of its international assistance programme. “Provided. . .”

But the gap between Syriza and the EU-IMF, most particularly Germany, remains, in the view of most observers, unbridgeable. And while the Greeks themselves still refuse to accept an equation between the election and ultimate euro exit, the rest of us, unconvinced, watch on in fascinated horror as a country appears to propel itself wilfully towards the abyss.

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