Yes or No, Greeks lose

Rubber-stamping the end of the European social model.

greece referendum
The Greek economy will creep even more precipitously towards the abyss, writes Tzafalias [Reuters]

When polls for Greece’s referendum close at 7pm Athens time on the evening of July 5, a chapter which began with the spy movie-like assassination of reunited Germany’s first privatisations chief, will have been completed.

It is not through a prism of conspiracy that one needs to look at these distinct developments, but through one of specific consequences, as milestones of sorts. Detlev Karsten Rohwedder, the first head of reunited Germany’s notorious “Treuhand” privatisations agency, reportedly wanted a greater role for public ownership of state assets. His successor did not. Further erosion of public wealth ensued, in the form of decaying production facilities in the former East Germany and an overall freeze or even regression of income for the working classes in the reunited country.

One Minute Greek Debt Crisis

Cut to 2015: In Greece, a nebulous “No/Yes” question calls people to reject or accept – in that order – an equally nebulous offer by their European Union and International Monetary Fund creditors which astonishingly no longer is in place.

Defiant Greek voters

However defiant or compromising Greek voters may prove to be and however caringly Greek Prime Minister Alexis Tsipras may gaze into the political distance, the economy will creep even more precipitously towards the abyss.

Capital controls, which have been put in place to limit a bank run which spiked when Tsipras announced the holding of a referendum, along with a credit freeze on the part of the European Central Bank, can have that effect, especially coming on the tail of more than five years of austerity policies which were implemented in return for loans by previous Greek governments.

So that’s that, then?

Lawrence “Larry” Summers, former treasury secretary under President Bill Clinton and key adviser to President Barack Obama, recently commentedin regard to the outcome of the Greek referendum that “the risk of catastrophe will concentrate minds and lead to positive surprises”.

The relative size of the Greek economy is small enough for the ECB to drip feed it while the country gives up all possible reserves, monetary and other, and eventually capitulates with a soft plop.


Summers was an architect of the post-Soviet world, so what could be the positive surprises? Moreover, given that one of his key allies from that period still is Germany’s current Finance Minister Wolfgang Schauble, what could be in store for Europe and the world?

One gets several hints from one of the most interesting conversations which took place so far this year and indeed was between Summers and Schauble, at a Council of Foreign Relations event in New York. Interestingly, it was one of the few occasions Germany’s finance minister publicly spoke in English, no doubt as a courtesy to the elite members of his audience.

But what Schauble said was even more remarkable. Shrugging his shoulders in his characteristic way, he told Summers that the West need not go into decline, even under today’s conditions in the global economy. Provided the necessary reforms are implemented, of course.

Incidentally, Schauble was the politician who oversaw the reunification of Germany and was destined to become his country’s leader, only to be overtaken politically by current Chancellor Angela Merkel.

European social model 

Drawing from Schauble’s method, “reforms” mean doing away with the European social model and diluting democracy in favour of a supposedly more efficient centralisation of power. For some analysts, this last element, that has been obvious in how the EU has been dealing with Greece, is a form of tyranny.

The relative size of the Greek economy is small enough for the ECB to drip feed it while the country gives up all possible reserves, monetary and other, and eventually capitulates with a soft plop. Zombification by a million pin pricks as opposed to a head-on collision. Tsipras’ desperate referendum move was a reaction to that, an effort to force some kind of resolution.

But even if we were to assume that Greece’s Syriza-led administration knows exactly what it wants and how to accomplish it, it still is one country against 18 others in the eurozone. Then again, can any country, if it is not a superpower, choose its own path? And will we also see an end of the Western tradition of liberal individualism, in view of competition from China? Greece’s ship-owning elites already are China’s preferred transporters and the two entities together are celebrating a China-Greece maritime year, whatever that means.

Oh, so is that that then?

When Europe’s Goldman Sachs-trained central banker recoils in fear at the sight of a confetti-throwing activist, one must remember that giving up is never the solution. And even if Tsipras proves that he is not the Che Guevara his supporters believe him to be, he may well have played a role as an instrument in a wider awakening. People instinctively realise something is wrong, even though they do not know what exactly. But the masks are off. And that is a start.

Menelaos Tzafalias is a freelance journalist and producer based in Athens, Greece. He has worked as an associate producer on the documentary Palikari: Louis Tikas and the Ludlow Massacre, a story about migrants and labour relations in early 20th century US.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.