March 30, 2015
Why are we sacrificing Greece for the insiders?Posted in Sunday Business Post · 108 comments ·
It hasn’t gone away, you know. The Greek crisis is back and this time it’s serious. The Greeks are about to run out of money again. Athens faces a €1.7 billion bill for wages and pensions at the end of the month and a further €450 million loan payment to the IMF on April 9 – and it doesn’t have the cash.
In a sign that the cash crunch has become more desperate, officials at Greece’s state healthcare service were asked on Tuesday to hand over a €50 million reserve for paying arrears owed to medical workers. Earlier this month, about €150 million of budget funding for hospital supplies was unexpectedly withheld, according to health ministry officials.
The government has so far rounded up more than €600 million of cash held by state-owned corporations, including contributions from the Athens metro company, the state electricity supplier, and the Athens water utility.
Moreover, about €300 million in EU subsidies due to farmers has been diverted to cover salary payments to civil servants, according to people briefed on how the cash crunch is being handled.
The Greek government is robbing Peter to pay Paul. Greece is being squeezed dry.
It is faced with a choice between capital controls in the Euro or ultimately, leaving the Euro. It is also clear the conditions being put on the Greek government are such that it must break all its election promises.
Thus, the Greeks are again being faced with a choice between their democratic mandate and their European commitment. This is pretty stark stuff. Amazingly, all the mainstream political parties have been queuing up to bash the Greek government. Why is this?
The Greek economy is broken. The society is fractured and there is a humanitarian disaster in the country, with many people surviving off food kitchens. Yet from Europe, when the Greeks need understanding and sympathy, they get threats.
No one is saying the Greeks are angels in this story, but there is a much darker narrative going on, and it is that the European mainstream political establishment is terrified of parties like Syriza – even though it was mainstream Greek politicians, not radical politicians, that oversaw the wholesale looting of, and corruption in, the Greek economy.
Now that is all conveniently forgotten, and the entire European mainstream is lining up to destroy Syriza and say to their own electorates: “Look, if you vote for non-conventional parties, see what will happen to you.”
Because we are now in an electoral cycle, the conventional parties need to crush Syriza to crush the other nonconformist parties and show their own electorates what voting in a nonconformist way leads to.
When looking at politics in mature democracies, I prefer to use the term insider vs outsider, rather than right vs left, urban vs rural or conservative vs liberal, to describe the electoral fault lines.
The insiders are those, literally, on the inside. They are the people with influence, with a voice at the table, those with a stake in the society. Insiders can either be on the left or the right. They can be traditional public sector trade unions who want no reform or they can be bank bosses who want a bailout. Their game plan is to gouge the state and extract as much rent as possible for their members and interests.
Insiders are organised. They are part of the process of politics and their concerns are listened to by the state. In short, they have access to power and can influence the way it is deployed.
In a crisis, when growth disappears, the insiders redefine their strategy and go into self-preservation mode. Their main objective is to make sure their members’ interests are protected from the slowdown in growth and that they get as big a share of the dwindling income pie as possible.
Interestingly, the insiders on the traditional left and conservative right join forces to pass on the costs of recession to the outsiders. This is why you see the statist left and the corporatist right in power all over Europe from Spain to France and Italy.
Sure, they might speak the language of left and right, and ham up their ideological differences for the audience, but essentially, they are both in the business of preservation.
Think about our Fine Gael/Labour coalition, or today’s German CDU and SPD grand coalition or even the Tory/Lib Dem pact in Britain. These are all parties of the apparent right in bed with parties of the alleged left.
Such expedience is classic insider behaviour.
The outsiders, in contrast, are those with no one to speak up for them. They have no stake in the political process and are thus on the outside. They are the self-employed small business person, the contract worker, the immigrant, the unemployed and, of course, the young.
They are outside the tent, beyond the process and, because they are not organised, their concerns are never felt.
They too can be on the left and on the right. The small shopkeeper could well have traditionally conservative instincts, while the twenty something contract worker could well be liberal to her core, but they are both outsiders. Neither has a real stake in society; neither has a voice.
What they do have is a vote.
And in the ‘spectator democracy’ which urges voters to give a ‘thumbs up or thumbs down’ every four or five years, the outsider, normally locked out, has a chance to be heard.
When there is economic growth, the insiders can buy off the outsiders with crumbs from the table. There is a little bit for everyone because the pie is getting bigger each year and the system works. However, when growth stops, it’s a different story.
For the insiders to preserve their position, it means that the outsiders must lose – and this is when the game moves from being a well-disguised process of ‘beggar my neighbour’ to an existential scrap between insiders and outsiders.
Because the outsiders are, by definition, not organised and rarely speak with one voice, in challenging times they are represented by unconventional parties who mix the rhetoric of the excluded with the tribal comfort blanket of the nation; who may offer the elixir of low taxes, with the promise of economic growth; and who appreciate the need for debt forgiveness in countries suffering from relentless deflation.
More than anything, these parties have identified that the mainstream, traditional parties are in cahoots, trying to maintain a status quo which is simply serving to featherbed the insiders.
This is the game in Europe. There is no ideology. Insiders are interested in power, and that’s it.
Syriza, for all its faults, offers an alternative narrative; it is a flawed narrative in some aspects and exemplary in others. But it deserves to be heard, not demonised.
In the weeks ahead, Greece will go bust again and this process will be used, shamefully, by mainstream parties around Europe that don’t have the courage to admit what is going on. So they, like all cowards, choose to laugh in a huddle at those who dare to be different.