Democracy Versus Reality
In the aftermath of Greece’s decision to reject the European Union’s bailout terms via the ballot box there has been much ink spilled celebrating the great “victory” of democracy this represents. Various politicians and public figures, overwhelmingly of one particular political persuasion, have proclaimed this to be a great day, a triumph of the popular will over the heavy handed demands of the EU’s technocracy.
This narrative has been present in the crisis of Greece almost since the onset. The demands by Greece’s creditors for austerity and economic reforms have been cast as an assault upon democracy from the beginning. Their refusal to be swayed from their position by the election of the quasi-socialist Syriza Party on a platform explicitly rejecting further cuts and fiscal restraint has been cast in the light of the heavy hand of tyranny crushing the will of Greek voters, with many tasteless comparisons of Germany’s Angela Merkel to another chancellor of somewhat more diabolical ambitions.
This is sheer and utter hogwash. The fact that Greek voters chose to elect Mr. Tsipras and his populist gang of plebeian rabble rousers does not alter basic reality. You can vote in favor of the sun not rising from now until the end of time, but that will not alter the simple scientific reality that it will continue to do so. The ballot box does not possess some mythical power to change fundamentals, and those fundamentals are quite clear. Greece has no money. Its banks cannot cover the deposits of their clients. Its government cannot pay the wages of its employees or the pensions and benefits of its citizens. As such, the bailout negotiations come down to Greece asking for money from the other nations of the European Union, a great deal of which is being supplied by Germany. These other nations have electorates of their own, and a duty of care to look to their interests just as much as Syriza claims to be looking to the interests of the Greeks.
It is a basic rule of any kind of lending that a creditor will only loan money if it has some reasonable assurance of being repaid. This is true when an individual applies for a loan from a bank, and when a government seeks financing to service its existing debts. The Greek voters are free to elect whatever government they wish, but they should not be surprised when this fails to sway the troika of creditors who see that the fundamental math of Greece’s financial woes remains essentially the same no matter what party holds power in Athens or however many referendums are held.
All this talk of democracy being quashed is merely a mask, if we are honest. What really upsets the Paul Krugmans and Naomi Kleins of this world is not that the ECB and EU refuse to be swayed by the populist tantrums of the Greek electorate, but rather the demands for austerity being made by them in the first place. To a certain segment of the political spectrum, an insistence on fiscal restraint and living within ones means is seen as a path to economic malaise. Advocates of Keynesian economics argue that only deficit financed stimulus can propel growth (ignoring the reality that nations such as Germany and Britain have managed for years to produce strong economic growth while also maintaining austere fiscal policies). Cold economic stats, however, do not have quite the same romantic allure as the narrative of poor, put upon Greece being cruelly crushed by the tyrannical jackboot of its troika of creditors, thus the myth of an assault upon democracy that has been concocted instead.
One can agree or disagree with this stance as one wills. Depending on one’s political orientation, austerity is either necessary medicine for economic woes or hemlock. However, to argue that Greece’s creditors have an obligation to simply keep writing cheques that they believe will never be repaid because the voters of Greece’s demand it is simply absurd. It is the opinion of Greece’s creditors that austerity is required in order for Athens to one day return to sound financial footing, and as it is Greece who is asking these creditors for further financing to expect them to change this opinion to suit Syriza’s whims is absurd. Mr. Tsipras can claim to have an electoral mandate to reject austerity all he wants, but he cannot claim to have an electoral mandate to change the minds of ECB.
There is an ancient tale of a British King who commanded the tides not to rise only to discover that he could not hold back the sea. That is the realization that has yet to come to Greek voters, it would seem. The basic facts of reality do not change to conform to the caprices of the electoral system. No vote or election or referendum can defy simple mathematical realities. To pretend otherwise is to engage in wishful thinking, nothing else. Given its past history as the birthplace of logic and rational thinking, perhaps it is high time Greece began employing both of these concepts to its own affairs.