Greek referendum: Divided we fall?

Greek referendum

Sunday’s referendum delivered a clear and resounding win to the “No” camp (61.3%vs 38.7%) but it gives the misleading impression that Greeks are strongly united about the way forward. Let’s not forget that the question in the referendum was whether to accept or reject a proposal that contained billions of new austerity measures. This forced thousands of Greeks to vote in favour of spending cuts and tax hikes that they did not want, but which they felt were the only way of safeguarding euro membership and a stable future.

To put them in this position was unfair of Prime Minister Alexis Tsipras. To his credit, Tsipras stressed the need for unity in his speech after the referendum. But divisiveness in Greece has been building for the last few years and it will take much more to heal the scars, especially after Sunday’s vote. The positive feeling from expressing exasperation with the policies being proposed by Greece’s creditors can dissipate very quickly, as Cypriots discovered a couple of years ago.

As we now know, what we experienced in 2004 (including the magical positive impact of the Olympic Games) was ephemeral. In fact, it was symptomatic of Greece’s weakness: The sense of rapid progress on the surface, while the structure beneath was rotting away.

The failure to address this contradiction was one of the key causes of the Greek crisis, which triggered the bailout programmes. The insistence of many Greeks on seeing things differently was the main driver behind the growing division in our society. From 2010, the country started to split into the pro- and anti-memorandum camp. There were those who felt that only the fiscal belt-tightening and structural reforms recommended by the lenders could put Greece on a path to recovery, while the opposite camp insisted that Greeks were being unfairly punished for sins they did not commit.

The tragedy in all this was that both sides were correct to a large extent. Instead though, some domestic politicians invested heavily in this rift. Outgoing New Democracy leader Antonis Samaras became the arch-proponent of the anti-memorandum line, feeding the populism that saw George Papandreou’s PASOK government as having sold out to the International Monetary Fund and other lenders. This rabid rhetoric is what gave birth to Independent Greeks, who became SYRIZA’s coalition partner in January.

Prime Minister Alexis Tsipras was another one who built his career and SYRIZA’s rise from an insignificant party of protest to one of government, on the back of dissatisfaction with the turmoil caused by the drastic adjustment programme.

The dissemination of myths about the crisis and its causes, as well as the social dislocation it caused, also provided fertile ground for the Neo-Nazis of Golden Dawn. The seeds of division were sown.

However, as the programme progressed and Samaras jumped from being an anti-austerity crusader to a bailout enforcer in late 2011, so the dividing lines in Greek society started to blur. In June 2012, when Samaras became prime minister, his coalition government was backed by Democratic Left, which was founded by SYRIZA defectors, making it even more difficult to pinpoint the source of disjuncture.

But still the country’s decision makers fed antagonism. Samaras’s New Democracy cultivated the “theory of the two extremes,” which saw SYRIZA as Golden Dawn’s ideological opposite and an equal threat to Greece’s stability. Greece’s liberals abandoned any attempt to ensure Samaras’ government remained socially and economically progressive, and chose instead to focus their fire on SYRIZA.

Tsipras, meanwhile, continued to spin his tale of populist simplicity, talking about the ease with which the crisis could be tackled despite the eurozone’s economic dogmatism and political arteriosclerosis on which previous Greek government’s foundered.

In fact, throughout the last five years the lenders have never failed to join Greece in this dance of rupture. From the start of the crisis, when European leaders shied away from giving their voters the full picture (undercapitalised eurozone banks et al) about why the Greek bailout was needed to the constant speculation about whether Greece deserved to stay in the eurozone, their decision-making has been marked by cowardice.

Just as Greek leaders fed separation within their own society for their short-term gains, so their European counterparts were willing to make an example of Greece that could be cast aside at any time to satisfy their own domestic goals. Greek prime ministers and governments came and went like ferries arriving and departing from Piraeus over the last five years. But Greece’s lenders never stopped to think whether they were helping to undermine political stability in the country they were meant to be assisting. As the unemployment rate, poverty levels and a myriad of other social indicators worsened dramatically, creditors acted as if growing dissatisfaction and vanishing trust were annoying side effects of the programme rather than developments that fundamentally undermined it.

That is, in brief, how we have arrived at this point. A Greek government which has convinced itself that its homespun fables will come true even though reality has consistently disproved them over the last six months. And European lenders unwilling to deviate from a policy path that had obliterated the Greek political system and left its society teetering on the edge.

The massive collective failure on all sides means that Greeks went to vote on Sunday driven almost exclusively by negative emotions. The “Yes” camp was motivated by its fear that things could get much worse, while the “No” voters were spurred on by their anger at their worsening lot in life. These are two groups that share much in common. Fatigue, fear, uncertainty and distrust- but nothing unites them. In fact, the “Yes” voters believe the “No” supporters are risking the country’s collapse, while the “No” camp accuses the “Yes” voters of lacking the courage to stand up to lenders.

This is now the new dividing line in Greek society. It will grow into a true fault-line if the Greek government’s efforts to keep the country in the euro fail over the next few days. The onus is now on leaders in Greece and the eurozone to lift the negativity and heal the division they have caused.


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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