Today marks a year since a radical left government was elected in Greece; its dynamic young prime minster Alexis Tsipras promising a decisive blow against austerity.
Yanis Varoufakis his unconventional finance minister arrived in London soon after and caused a media sensation.
Here was a government that disregarded stuffy bourgeois conventions and was spoiling for a fight.
Expectations were high.
Why did it end like this?
An urban myth propagated in some media circles suggests that the radicals were stopped by a coup engineered by conservative politicians and EU officials – determined to eliminate any risk of contagion.
Syriza was overcome by the monsters of neoliberalism and privilege.
Still it fought the good fight – perhaps even sowed the seeds of rebellion.
The reality is very different.
A year ago the Syriza leadership was convinced that if it rejected a new bailout European lenders would buckle in the face of generalised financial and political unrest.
The risks to the eurozone were they presumed greater than the risks to Greece.
If Syriza negotiated hard, it would be offered an ‘honourable compromise’ relaxing austerity and lightening the national debt.
The mastermind of this strategy was Varoufakis – but it was avidly adopted by Tsipras and most of Syriza’s leadership.
But Greece’s tragedy – which is far from over – is playing out against the background of a simmering crisis in the global economy.
Indeed if the Bank of England’s chief economist Andy Haldane is worth listening to – which he almost invariably is – Greece’s travails are merely one part of the long-running financial and economic crisis that has rippled around the world since the US investment bank Lehman Brothers collapsed seven years ago.
On this analysis the Federal Reserve’s decision to delay its long-planned interest rate rise last Thursday is another part of the same unsettling picture.
Opposition demands answers after covert proposals attributed to Yanis Varoufakis and fellow ex-minister highlight deep split in Syriza party.
Some members of Greece’s leftist-led government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma – according to reports that highlighted the chaos in the ruling Syriza party.
It is not clear how seriously the government considered the plans attributed to former energy minister Panagiotis Lafazanis and ex-finance minister Yanis Varoufakis. Lafazanis was sacked from his post and Varoufakis resigned earlier this month. However, the revelations have been seized on by opposition parties who are demanding an explanation.
The reports on Sunday came at the end of a week of fevered speculation over what Syriza hardliners had in mind as an alternative to the tough bailout terms Tsipras has reluctantly accepted to keep Greece in the eurozone.
About a quarter of the party’s 149 MPs rebelled over proposals to pass sweeping austerity measures in exchange for up to €86bn (£60bn) in fresh loans. Tsipras has been struggling to hold the party together.
In an interview with Sunday’s edition of the RealNews daily Lafazanis said he had urged the government to tap the reserves of the Bank of Greece in defiance of the European Central Bank.
Lafazanis – the leader of a hardline Syriza faction that has argued for a return to the drachma – said the move would have allowed pensions and public sector wages to be paid if Greece were forced out of the euro.
(ed:..i repeat my prediction that even more misery inflicted on the greek people will further radicalise them..and that varoufakis will then be elected prime minister with a mandate to take greece out of the euro and back to the drachma..)
The crisis has hit Greece hard but none are harder hit than its young people. With nearly 60% unemployed – many are living in limbo – waiting for their lives to start. Daniel Howden and Yiannis Baboulias report from Athens on the stark choices facing a generation.
There is little patriotic encouragement to be found in the official statistics. Greece’s jobless army now numbers more than one million according to July figures from Greece’s unemployment bureau the OAED. The numbers are bleak from almost every perspective. Unemployment among those aged 25-30 – the age by which almost everyone has formally joined the labour market – has climbed to more than 25%.
Greece’s economic descent has been deeper than the United States’s during the Great Depression, with the main difference being that as it has lost more than a quarter of its economy there is little prospect of a recovery. It has swept away old certainties – including the ambition of a safe job in the public sector.
Every drama needs a great baddie and in the latest act of the Greek crisis Wolfgang Schäuble the 72-year-old German finance minister has emerged as the standout villain: critics see him as a ruthless technocrat who strong-armed an entire country and now plans to strip it of its assets. One part of the bailout deal in particular has scandalised many Europeans: the proposed creation of a fund designated to cherrypick €50bn (£35bn) worth of Greek public assets and privatise them to pay the country’s debts. But the key to understanding Germany’s strategy is that for Schäuble there is nothing new about any of this.It was 25 years ago during the summer of 1990 that Schäuble led the West German delegation negotiating the terms of the unification with formerly communist East Germany. A doctor of law he was West Germany’s interior minister and one of Chancellor Helmut Kohl’s closest advisers – the go-to guy whenever things got tricky.
The West Germans on the other side of the table had the momentum the money and a plan: everything the state of East Germany owned was to be absorbed by the West German system and then quickly sold to private investors to recoup some of the money East Germany would need in the coming years.
In other words: Schäuble and his team wanted collateral.