Has Tsipras forced Greece into the abyss?

 

By Ismail Veli……

The ongoing Greek crises in the EU has practically dominated the news headlines for weeks. The Greek Prime Minister Alexis Tsipras unable to take firm decisions on how to challenge what his government considered to be ”Terrorism”, by the Euro zone countries on forced reforms on Greece raised the stakes by concluding that a referendum Tsipras celebratesby the Greek people was needed in order to give him the mandate to challenge the EU austerity proposals. He seemed to believe that a resounding OXI/NO would force the Euro zone countries to see that the Greek people and government would never bow to the ”Humiliating and terrorism or blackmailing” of EU governments. The resounding 61% support he received on the 5th July, saw jubilant crowds celebrating what looked like a national holiday.  One could be forgiven for thinking that perhaps the Greek people gave the impression that austerity was at an end, and by some miracle Tsipras was about to save them from the last few years of economic woes.

By the 8th of July however with the Greek banks still closed and Tsipras facing a frosty reception at the EU parliamentary talks, it finally seemed to be dawning that Tsipras had very little bargaining power and all trust in his government had been lost. The bottom line was that without financial support from countries he called ”Terrorists” Greece would face a total collapse. His naive and ill advised political blackmail seems to have completely backfired.

Guy Verhofstadt leader of the liberal ALDE group in the European Parliament, and former Prime Guy Verhofstadt 2Minister of Belgium gave what turned out to be the highlight of the EU parliamentary debate. He questioned why Greece was not taking the necessary reforms needed to scale down privileges enjoyed by the Military, The Orthodox Church and the rich shipping tycoons, which in effect seemed to have  a status in Greek society that is above the law. With  less than a 5 million workforce trying to sustain a non productive population of over 11 million, and of those who work, only about 40-45% not paying tax, it does not take rocket science to understand that Greece has not only lived beyond its needs for decades, but is a state that simply relies on international funding in order to survive. As an outsider with little knowledge of the ”privileges of the groups mentioned by Guy Verhofstadt, I thought a little homework or research was needed to find out a few facts and figures.  I was absolutely shocked to find out that Greece had since the mid 1970s spent something like 216 Billion Euros on arms. This was almost two thirds of its total international debt. I was even more surprised that as recent as 2009 Greece had the 7th highest expenditure of defence in the world. This amounted to 1230 dollars per head of population. A simple calculation means that if Greece cut this by 500 dollars per head of population a saving of 5.5 billion could be achieved a year. In 20 years this would amount to about 110 billion Dollars. Instead Tsipras under considerable pressure finally  proposed to cut military spending by a meagre 300 million Euros in two years, which amounts to a meagre 12 and a half million a month.  But the joke does not end there. It seems the Orthodox church owns something like  130 thousand hectares of land, (roughly 325.000 acres) a 1.5% stake in the Bank of Greece, an estimated 500 or more monasteries, 7,945 parishes and an unknown amount of artefacts,  commercial revenues and shares in government companies.

MOD expenditure and Church tax

The shocking thing about all this wealth however is that the Orthodox church’s tax payments amounted to a meagre €2.5 million in 2010.  Is it no wonder that the Euro zone countries are at their wits end on Tsipras trying to blame most of Greece’s woes on the doorsteps of Europe, while hardly scratching the surface of potential tax revenue that can and should be collected. The shocking thing is that most Greeks seem to believe that the defence spending is justified due to the perceived ”threat from Turkey”. How a bankrupt country like Greece believes that even in the event of an ”imaginary attack by Turkey” they can actually sustain itself in a military confrontation seems to be overlooked. The irony is that while Greece in 2009 spent 1230 dollars per head of its population, the so called ”military bully” Turkey only spent 240 per head on defence. So despite the austerity, the Greek government in 2011 spent an incredible 7billion on arms. While some of the root of today’s financial crises lies in the fact that between 2002 to 2006 Greece was the 4th largest importer of weapons in the world. The staggering news that Greece, despite its inability to pay its debts still holds the position of being the 10th largest importer of arms in the world, with the result that it spends nearly double as a proportion of its GDP (Gross domestic product) than any of its EU partners.

Top Euros for arms

According to RT’s Peter Oliver, Greece has a ”less than transparent procurement  process and  a reputation for budgetary corruption”.

“Greece still considers that it is facing a threat from Turkey. And that we need to maintain credible military forces to deter that threat,” Thanos Dokos, the Director-General of the Hellenic Foundation for European & Foreign Policy.

The drama played out by Tsipras and the now resigned Finance Minister of Greece, Varoufakis, would have the unsuspecting neutrals believe that the Syriza party has  a duty to protect the ordinary poor and long suffering Greek population from the Varoufakis and Tsiprasausterity imposed by the Eurozone and international banks. To blame past woes on Tsipras and his party would of course be quite unjust. After all they have only been in power for no more than six months, but the almost amateurish and confrontational manner in  which Varoufakis and Tsipras have attempted to throw the guilt cable at their Euro zone partners has been one of immense miscalculation, and have brought the Greek economy and financial institutions to a complete dead end. A true leader is not one who looks to shift the blame on those who have pumped billions of European tax payers in bailouts, but one who looks at the harsh realities of a failed system, of cronyism, corruption and incredible ineptitude that beggars belief. The last words must surely belong to Guy Verhofstadt who asked Tsipras  whether he wanted to be remembered ”As an electoral accident who made his people poorer in his country? or do you want to be remembered, Mr Tsipras as  a real revolutionary reformer?”

While Tsipras gambled on the referendum, his chess games of political ineptness having backfired, he is showing an inability to accept what needs to be done, that is to cut defence spending, force the Church and shipping tycoons  to pay their fair share in taxes. In the meantime the Greek public are plunged  into ever more misery by the Downward graphprolonged negotiations of their EU partners who have lost all their trust in the Greek political establishment. Any agreement reached will now involve much stricter criteria, and harsher austerity than what Tsipras asked the Greek people to vote at the referendum. Many would point out that it’s the democratic right of Greece to say NEI or OXI, but what Tsipras miscalculated was that his partners in the Eurozone also had, and will continue to have, the democratic right to answer to their own electorate and taxpayers on whether they should throw an infinite amount of money into a bottomless pit. So while Tsipras will no doubt renege on his promise to reject austerity, any new agreement will not only finally force him to accept  harsher terms, but these will also have to be backed by  much stricter guarantees of economic reforms than was imposed in the last two bailouts.

How events in the coming days and weeks will unfold is purely guess work. The statement  Guy Verhofstadt made on the 8th of July however,  will I’m sure haunt Tsipras for the rest of his life.