Almost six years into Europe’s roller-coaster debt drama, the man at the forefront of the continent’s anti-austerity movement, Greece’s newly installed prime minister Alexis Tsipras, is going to Berlin.
“We are looking forward to this meeting,” says the Greek government spokesman Gavriel Sekallarides. “There’s a good chemistry between the two leaders. It’s much better that they talk directly to one another.”
Less than a week after the German chancellor Angela Merkel extended the invitation to hold talks, anticipation is growing. Against a backdrop of unprecedented tensions in bilateral relations, the meeting is being seen as a “moment of truth,” a potential decisive turning point in the crisis that has rattled the global economy.
Two months after Tsipras’ leftist Syriza party catapulted into power, the rhetoric between Athens and Berlin has rarely been as shrill. Amid calls for Merkel’s coalition government to pay reparations to the victims of Nazi war crimes and growing voter impatience in Germany, Greece’s place in the eurozone is being increasingly questioned. In a poll released on March 13 by the public broadcaster ZDF, 52 percent of Germans said they thought it was time for Europe’s most heavily indebted state to leave the 19-member bloc.
With the standoff becoming ever more poisonous – and Greek cash reserves running out fast – Athens’ finance minister Yanis Varoufakis pleaded on Friday for both nations to reimagine their shared future.
“We should work towards ending the toxic ‘blame game’ and the moralising finger-pointing which benefit only the enemies of Europe,” the economics professor wrote in his highly read blog. “Looking ahead, and beyond current tensions, our joint task is to re-design Europe so that Germans and Greeks, along with all Europeans, can re-imagine our monetary unions as a realm of shared prosperity.”
The appeal came as senior Greek government officials said they were looking to strike an “honorable compromise” with the country, which has contributed more than any other to the $260 billion European bailout program that is keeping Athens afloat.
Like many Greeks, 90-year-old Spyros Mercouris is pleased with the way the leftist-led government has defended his nation’s interests since assuming office. For the first time since the crisis erupted in late 2009, Mercouris says, Greek’s leaders are fighting to dismantle fiscal policies that simply do not work. He rattles off the record rates of poverty and unemployment that have befallen the tiny Mediterranean state since it was forced to implement draconian belt-tightening in exchange for aid.
Mercouris, a prominent organiser of cultural events and exhibitions has vivid memories of the famine and mass executions that accompanied the brutal occupation of Greece by Hitler’s forces during World War II. “I can still hear the cries of people on the street who were hungry,” he says. “None of us who lived through it have forgotten the German occupation. I didn’t vote for this government, but I like the way it is standing up to them and defending our rights.”
“It would not be too bold to suggest that austerity in Greece has failed,” Mercouris adds. “Greece is not an occupied country. It has simply borrowed money and is paying back loans that were irresponsibly taken and irresponsibly given.”
As pressure on Athens to implement further cost cutting measures has mounted in recent weeks, so too has anti-German sentiment. Addressing parliament, Tsipras accused Berlin of employing “legal tricks and delay” to avoid making amends for the atrocities wrought during three years of Nazi rule. In addtion to the more than 400,000 Greeks who were executed or died of hunger, the Third Reich pillaged cultural treasures and made Athens submit to a forced loan to finance Hitler’s invasion of Africa. Berlin, Tsipras insisted, has a “moral obligation” to compensate Greece. “Germany has never properly paid reparations for the damage done to Greece by the Nazi occupation,” he told the 300-seat House.
The issue of war reparations will almost certainly be addressed when Tsipras meets Merkel, “although it is unlikely to be the main point of conversation,” government spokesman Sekallarides said.
Many worry that Athens is going too far. Although the Greek premier attempted this week to reassure Germany that he would implement unpopular reforms, concerns are growing that the anti-austerity government is simply trying to buy time. Faced with a mountain of maturing debt – repayment obligations this month alone exceed $1.6 billion – Greece is fast running out of cash. Massive outflows from local banks have exacerbated the liquidity problem. Many Greeks fear that the government will be unable to pay pensions and salaries at the end of the month.
“We are very near the moment where things could get out of control,” said Nikos Dimou, a celebrated writer whose book, “On the Unhappiness of Being Greek,” is a bestseller in Germany. He conjured up the specter of chaos that might ensue if Greece were ejected from the eurozone. “An accident in the form of a run on banks could easily happen,” Dimou said. “Humpty Dumpty is at the point of falling off the wall.”
If it weren’t for the support of Washington, some say Athens might already have suffered that fate. The Obama administration has voiced concerns over the geo-strategic repercussions of a potential Greek collapse. The Greek government’s sudden courting of Russia – on April 8 Tsipras will hold official talks in Moscow — has added to worries that Greece could fall out of the West’s sphere of influence. The country is crucial to NATO’s southeastern flank, but it shares some cultural affinity with Russia, where Orthodox Christianity also plays a central role.
“The situation is very delicate,” said Theodore Coloumbis, professor emeritus of international relations at the University of Athens. “Greece should not overestimate its strategic importance, which is nonetheless considerable. In the chain of pro-western countries that stretch from Portugal to Turkey, Greece is a very important link.”
That’s why U.S. officials worry that by fixating on fiscal targets, Europe may be losing the forest for the trees. Political analysts say Washington has impressed on Merkel the need to keep Greece in the western fold, but the German chancellor faces an increasingly hostile constituency at home. “German voters have clearly run out of patience with Greece,” says Dimitris Keridis, a professor of political science at Panteion University. “Merkel does not have much room for maneuver. Tsipras on Monday will almost certainly plead for flexibility to save face and sell a deal to his own voters given that he cannot act on pre-election promises. But beyond offering a few words of consolation there is not much Merkel can do.”