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Greece Is Over Its Crisis, but Europe Isn’t

by | Jul 3, 2019 | English

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In Greece, a cycle is ending, and the country is returning to political normality. But across Europe, the legacy of its crisis is still a factor.

By RACHEL DONADIO, The Atlantic

It has been a problem child, a sick man, a canary in a coal mine, a warning sign, and a long-running experiment into where economics meets politics, with a significant social toll. It has become a rallying cry for Brexiteers and right-wing populists, and has revealed some of the deepest fissures in the European Union.

Nearly a decade after it required a bailout in 2010, Greece remains one of the most polarizing issues in Europe, and politicians across the EU draw different—and politically convenient—lessons from how European institutions handled, or mishandled, its crisis.

Here in Greece, a cycle is ending, and the country is returning to political normality and stability. On Sunday, it will hold national elections—its first sinceexiting a bailout regime last year—in which Kyriakos Mitsotakis’s center-right New Democracy party, a pillar of Greece’s pre-bailout establishment, is expected to defeat the left-wing populist Syriza party, led by Prime Minister Alexis Tsipras. Syriza came to power in 2015 demanding an end to the crippling austerity Greece was forced to undertake as a condition of its bailout, but ended up having to implement it anyway—at the behest of the European Union and the country’s other creditors.

That apparent tension—between national sovereignty and continental unity—still animates much of the debate in Europe about Greece. It is a dynamic that is as much psychological as it is political, and goes beyond the financial and moral obligations of membership to a common-currency area. It is about how much austerity a country can withstand without breaking, about whether Greece needed to be punished, and about whether being part of the EU (and the euro) is a help or a hindrance.

In Italy, for instance, few days go by without Matteo Salvini, the country’s right-wing populist interior minister and the man widely seen as a leader-in-waiting, saying that Italy doesn’t want to “meet the same fate as Greece.” In Salvini’s rhetoric, winding up like Greece means ceding national sovereignty to the baddies of the European Union, who in turn would impose an emasculating austerity regime on Italy. His party has long flirted with the idea of exiting the euro, or even creating temporary IOUs as a parallel currency—a notion that fires up the base, but is not likely to happen because it’s illegal and would cause the single currency to collapse.

On social media and in the piazzas where he’s been campaigning, Salvini frequently cites a figure from the past: Mario Monti, who led Italy at the height of Europe’s debt crisis, from 2011 to 2013, during which the country raised the retirement age in a pension reform that the current government in Rome is working to overturn. For Salvini’s voters, the mere mention of Monti, an unelected technocrat who governed Italy with the blessing of Brussels, triggers a sense of outrage.

That’s because in Italy, membership in the European Union has always been seen as an external constraint, something that forced the country to get its house in order before the introduction of the euro and that helps keep it in line now. The general perception is that Italy wouldn’t step up on its own unless compelled to. Monti’s government embodied that, and the current populist government came to power as a response to a perceived loss of national sovereignty.

Last summer, when forest fires ravaged an area outside Athens, killing 103 people, Federico Fubini, a deputy editor of Italy’s leading daily, Corriere della Sera, wrote a column asking whether budget cuts to Greek state services might have made the fires harder to contain. “You cannot imagine how viral that article became. I think I’ve never written an article that was received so violently,” Fubini, the author of a new book, Per Amor Proprio: Why Italy Should Stop Hating Europe (and Stop Being Ashamed of Itself), told me.

Euroskeptics from Salvini’s League party cited his column as evidence of how “austerity kills,” Fubini said, while “the pro-Europeans attacked me very violently because they said my data was fake.” Greece’s so-named troika of lenders—the European Commission, the European Central Bank, and the International Monetary Fund—is on the defensive about the social and human toll of the austerity it imposed on Greece in exchange for the country’s bailout. After Fubini’s column appeared, a senior European Commission official wrote a letter rebutting his argument. “The minute I provided the data, the whole discussion died out,” Fubini told me. But it showed how sensitive the issue of Greece remains in Europe.

Remainers are also trying to own the Greek experience as evidence in their prosecution of the Brexiteers—particularly the claim by Johnson and others that they will be able to negotiate a better deal with Brussels by threatening to leave without a deal. Britain will be treated just like Greece, they warn.

This Sunday’s Greek elections, which Tsipras called early, after his party’s poor showing in European Parliament elections in May, in some ways mark the end of an era of crisis politics. Tsipras and his Syriza party came to power as a protest vote against establishment parties that had alternated in power, with one technocratic leader in the middle, ever since Greece requested a bailout in 2010. On Syriza’s watch, Greece has exited its bailout program, but the economy has continued to suffer.

In the hot summer of 2015, Tsipras challenged Greece’s creditors with a referendum on the bailout package, and for a moment, talk of Grexit was back on the table. Greek voters wanted to reject the terms, but keep the euro. After that, Tsipras had to do an about-face and stick to the terms of Greece’s bailout. This time around, a vote for New Democracy, the market-friendly old guard, is its own protest vote against Syriza’s handling of the economy and the country.

To some in Europe, Tsipras’s transformation from leftist radical to austerity-imposing European team player offers a lesson in how populists moderate in power, under the discipline of European institutions and markets. But that is “a dangerous conclusion to draw,” said Catherine Fieschi, the executive director of Counterpoint, a British think tank. The Greek situation was extreme and unique. “I don’t think that situation would be replicable across the board,” Fieschi told me. “It gives us a false sense of security.” Italy’s Salvini would moderate only if doing so was in his own interest, not Europe’s, she said.

While other countries in Europe are now sliding into populism, Greece has already gone through that phase and now looks poised to return to an establishment. This, too, may be another lesson from Greece. Things can change, and change back.

Tom McTague contributed reporting from London.

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