Greece will go to the polls on June 17 for the second time in as many months. In all likelihood, voters will lend even more credence to the Syriza leftists' protest against austerity, committing what NACM Economist Chris Kuehl, PhD described as "an act of self-destruction based on principle."
As hard as European leaders have tried, the depth of Greece's woes has yet to be understood by her people. This isn't all that shocking, as every country has its fair share of deluded voters. What is troubling, however, is that Greek political leaders, namely those in the Syriza party led by leftist firebrand Alexis Tsipras, share the people's willful rejection of the reality their country now faces: implement austerity measures or face economic doom.
History, Kuehl noted recently, offers an explanation for this attitude. "The Syriza position is that all Greece has to do is refuse the austerity plan and the Europeans will balk since they will do anything to keep Greece in the euro zone," he said. "This seems a ludicrous position, but is rooted in historical reality."
During the Cold War, Greece used its leverage as a post-World War II battleground state to bargain its way into profligate government spending. By threatening to join the other Balkan states that accepted roles as Soviet surrogates, Greece was able to get whatever it wanted from western political leaders. "Greece did not really qualify for membership in the euro zone but the powers that be looked the other way every time it was suggested that refusal would tilt Greece toward the USSR," said Kuehl. "They defied nearly every European demand made on them by simply threatening to bolt to the other side…That was the tool Greece used to bolster its financially inept system, and that is essentially what Syriza is trying to do now."
Now that the USSR is no more and European sympathies toward Greece have all but evaporated, this position has gone from being merely anachronistic to practically suicidal. "The bluff is very likely to be called and the Greeks will be left with no position to play from," said Kuehl, noting that the popular position among Greeks, held by the Syriza party, to reject austerity measures equates to a "mad act of financial self-immolation that condemns the country to life as an isolated third-world state clinging to the edge of a Europe that seems more than willing to be done with the Greeks."
Jacob Barron, CICP, NACM staff writer