Earlier this year, the radical left-wing Syriza party won a
historic election in Greece that vehemently rejected the years of mandated austerity policies and ushered in a revolt against the European Union status quo. The Syriza party, also known as the “Coalition of the Radical Left,” has risen from a small fringe movement with only 15,000 registered members in 2012, to the new government party in a country of over 11 million people.
The newly elected Prime Minister, Alexis Tsipras, who has lead Syriza since 2009, is currently participating in harsh negotiations with the European Union to attain further loans, enact reform, and avoid bankruptcy. It is by all means a case of David vs. Goliath, and the EU leaders in Germany and Brussels are doing their very best to back the new government into a corner. But optimism remains, and the Economy Minister George Stathakis recently said "I believe that at the beginning of next week we will have an agreement on the package of reforms the Greek government is proposing, and on the funding of the country.”
The German government has been the most strident supporter of austerity measures over the past five years, and stands directly in the way of the new Greek government and the reform it promised voters a few months ago. Tsipras has quite understandably called the current situation in Greece a “humanitarian crisis,” which is not hyperbole. Greece currently has about a 25% unemployment rate, a third of the people live below the poverty line, 300,000 live without electricity, and infant mortality rates have shot up over the years. Thanks to the draconian austerity measures, crucial government services, like hospital budgets have been cut, and over 800,000 people lack health services. This humanitarian crisis has been inflicted by bailout requirements, and much of the money cut in crucial social services have simply been shifted to paying interest to the IMF and German banks.
Out of all European countries, one would expect Germany to be the most weary of inflicting harsh economic terms on an already desperate country. In 1919, John Maynard Keynes wrote “The Economic Consequences of the Peace,” which declared that the Treaty of Versailles, which ended World War One with severely punitive war reparations imposed on Germany, would result in economic collapse and political backlash. It was a Carthaginian peace, a term referencing the defeat of Carthage by Rome in the Second Punic War, when Rome imposed a brutal peace settlement which ultimately burned Carthage to the ground and enslaved all of its citizens.
As it turned out, Keynes was correct. The economic terms, which were largely personal, arising from the severe treaty settlements Germany had enforced of France after the Franco-Prussian War in 1871, caused absolute chaos. Keynes wrote: “If we aim at the impoverishment of Central Europe, vengeance, I dare say, will not limp. Nothing can then delay for very long the forces of reaction and the despairing convulsions of Revolution, before which the horrors of the later German war will fade into nothing, and which will destroy, whoever is victor, the civilization and the progress of our generation.” The economic chaos eventually lead to the rise of the Nazis in Germany, and WW2, as Keynes predicted, made the horrors of WW1 seem mild.
Today, Germany is the one who will not relent. Years of austerity measures have forced Greece into desperation, and the January elections clearly show this. The Syriza party ran on an anti-austerity platform, and it is doubtful they will acquiesce to the hated Troika. In America, where more stimulus and less austerity policies were enforced during the recession, the economy is now recovering and doing better than it has in years. The eurozone, on the other hand, remains in crisis mode, and even the successful economy of Germany has been sluggish over the years, compared to America.
In the less stable countries, like Greece, austerity has not only created sluggish recovery, it has created unnecessary suffering. And out of suffering comes inevitable revolt. It would be wise for Germany and other EU leaders to look at the destructive realities that strict austerity has created, and negotiate with the Tsipras government for reform. Greece has been overwhelmed with poverty over the past five years, and as Keynes said, “If we aim at...impoverishment...vengeance, I dare say, will not limp.”