Schauble890For thirty years now Niels Kadritzke has been following the developments in Greece, where he also spends a part of the year.  He regularly writes about Greece in German Newspapers (Tageszeitung, Financial Times Deutschland, Berliner Zeitung, Le Monde diplomatique-German EditionNachDenkSeiten).

In his latest article in Le Monde diplomatique “Grexit and the left wrong-way drivers” (Grexit und linke Geisterfahrer, 12.3.2017) he sheds light upon the Grexit discussions since 2010, and he voices support for Greece to stay in the Eurozone disagreeing with the Grexit narrative of some German conservatists as well as the one of certain Greek left-wingers, while also making a long reference to James K. Galbraith account of the relevant negotiations in 2015. In the following excerpts* from his long-read article Kadritzke stresses that the German Minister of Finance Wolfgang Schäuble stance is now more threatening than it was during the peak of the 2015 crisis and fits in well with the scenario of  a multi-speed Europe:

[…] “Wolfgang Schäuble’s motives and efforts in favor of Grexit have not always been the same. As early as 2010, the German Minister of Finance elaborated a plan B, at a time when half of Europe speculated on Greccident: an unplanned exit from the eurozone after a Sovereign Default. Certain governments sought detailed advice from Financial Institutions like Rothschild, upon the impact of Grexit on the entire Eurozone. […]

The US Minister of Finance Timothy Geithner didn’t know what a Grexit would be like, until the end of July 2012 when he paid a visit to his German counterpart in Sylt. Many in Europe considered Grexit a “desired strategy”, explained Schäuble to his guest. A Grexit would be such a traumatic experience that, out of fear, other member states would “surrender more national sovereignty”. The cold calculation: “Ιf Greece was left burned out, it would be easier to build a stronger Europe within a more credible firewall”.

By the term “surrender of national sovereignty” Schäuble referred to the willingness of member states to subject to the requirements of strict budgetary discipline, what Schäuble considered the only remedy to cope with the Eurozone crisis. A Grexit would initially sort the wheat from the chaff. Afterwards, each member state aspiring to stay in the Eurozone should take its own decision. But what about Greece? It would only be a collateral damage on the motorway towards a German Europe.

Schäuble was initially blocked by the Financial Markets that anticipated the threatening impact for Portugal, Spain and possibly for Italy. His next Grexit-attack didn’t come until 2015, when Greece was once again to the edge and Tsipras Government was urged to sign what Troika dictated.  Schäuble made then his threat so brutal that many member states were shocked.  If Tripras didn’t give in, according to the Ultimatum of 10 July, Greece would be offered rapid negotiations on a five year “time-out” from the Eurozone along with a potential debt relief. […]

However, the Greek Prime Minister had never uttered a word about Grexit and certainly not before the Referendum of 5 July. Yet, on the eve of the people’s vote he made clear that he wished Greece staying within the euro and that a “NO” of the Greek people would just provide a better outcome to the negotiations. When asked, in an interview with the left-wing Journal “Efimerida Ton Syntakton”,  if he had considered the idea of Grexit, Tsipras answered:  If I had ever considered the idea, it would have been like giving my support to the toughest representative of the opposite side. It would have been either something stupid or a real treason, with disastrous consequences for the workers who would see their purchase power and their living standards lower. It would be disastrous for the entire Economy.”

The answer sounds honest but it refers to a great problem: During the last 7 years of the crisis, Greece has suffered a serious fall in living standards and unemployment has slightly decreased only because thousands of migrant workers - especially young - are no longer included in the statistics. And yet, Grexit still remains an issue. During the last negotiation crisis Schäuble made himself clear enough: The Creditors must continue their pressing on the Greeks, otherwise should the latter take the decision to leave the Eurozone. 52% of the German people and 75% of the AfD supporters are in favor of this alternative. (Forsa - Poll in Der Stern, 22.2.2017). […]

Schäuble’s Grexit-option is somehow more threatening than in 2015. It fits in well with the scenario of  a “Europe of the Willing” or a multi-speed Europe where Germany and other core countries shall stay in the fast lane, the Southern countries and other laggards shall stay in the slow one, whereas those in need of emergency and of  IMF’s  towing service shall halt on the hard shoulders.

If this is the case, Merkel seems to agree, then the left-wing [Greek] Eurosceptics will be proven right, when considering that a Monetary Union without a common tax policy and without Eurobonds would have no future. ​

But being right, does not constitute an alternative. Especially for Greece there seems to be no alternative. The return to the national currency, weak and devalued, would be an emergency exit with extremely high risks for Greece that is heavily indebted and with weak export performance. […]

[Well known Greek Eurosceptic] Panagiotis Lafazanis and his comrades (when still belonging to Syriza’s left wing) thought  Greece could get funds from China or Russia or oil supplies from Venezuela. But when all these alternatives proved not to be realistic, they were phased out of their integral narrative.”

*Translated by Avgi Papadopoulou

Read more Niels Kadritzke's opinion pieces in English: Le Monde diplomatique-English edition - Niels Kadritzke

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