Shock and awe in Athens

Of the many disturbing scenes I witnessed during the week of Greece’s July 5 referendum on austerity, the most memorable one was at the cash register of a boutique selling 20-euro dresses. A saleswoman’s face lit up at the sight of several notes in a customer’s hands.

“Wow, so many 10-euro notes,” she sighed, half to herself, a dreamy look misting over her face. “Where did you get so many?”

Not since Communism’s collapse have I seen such a reaction to the sight of low-denomination Western currency. The second week of shuttered Greek banks and daily limits on ATM withdrawals was already making life difficult for businesses in Athens.

“The next step will be not being able to offer clients change,” the saleswoman said, glumly. “The one after that not having the money to purchase products, and moving to a barter economy.”

In Athens’ Syntagma Square, down-and-outs slept on the pavement or scrounged in trash bins alongside snaking, post-midnight ATM queues populated by disheveled members of Greece’s former middle class. At a medical clinic run by the Greek NGO Praxis, a coordinator told me that six in ten patients are Greek natives, even though the district she operated in were made up predominantly of immigrants.

At Athens International Airport, vacationers and the Greeks who could still afford air travel mingled outside a currency exchange office whose electronic screen featured a rhythmically flashing legend written only in Greek: “Of course we have!”

A smiling teller confirmed the question on every Greek’s lips these days: Do you have euros to be bought?

The scene couldn’t have been more different from the 1980s and 1990s, when Greeks looked West with unprecedented optimism as a sweeping media campaign promised that joining the European Union and a single currency would create a new breed of Europeans out of the Greeks, a people that for centuries inhabited a no-man’s-land between East and West.

The implication then was that all of the Greeks’ Eastern influences — their brand of Christianity, their sharing traditions with the folk Islam of the Ottomans, the colloquial language peppered with Arabic and Turkish borrowings — could be Westernized and improved through closer ties with the country’s European neighbors. Many Greeks bought into it.  

A few dissenting voices did slip through the popular culture barrage back in the day, though. In the 1981 film, “You’re in the EEC, learn about the EEC,” a farmer struggling through layers of smalltime institutional corruption to sell his oranges maneuvers past a corrupt village mayor, his fascist police-chief sidekick and the doctrinaire local Communist Party chief, to come to the realization that joining the EU will not change much as long as Greeks don’t change themselves, and that the Europeans are “searching for backward, underdeveloped peoples like ourselves to exploit … they promise us a lot more than they will deliver.”

 “As long as those in Athens don’t establish the infrastructure, decentralization, and local associations needed to cut out corrupt intermediaries, there won’t be strong foundations to build something new,” he concludes.

Those words flashed through my head last week, when I spent some time in the city with a Greek diplomat. The fast-moving events of the past month pushed the civil servant to swap his suit for street clothes after work and roam the city documenting ever more visible signs of its degradation. “We might be a few days away from a more general collapse of the state,” he told me.

Yesterday, anti-austerity clashes broke out outside the Greek parliament. Protestors hurled rocks and Molotov cocktails; the police fought back with tear gas and pepper spray. 

None of this was entirely surprising. Greece’s first radical left government since the 1946-49 civil war was widely expected to perform a backflip, tone down its anti-austerity rhetoric, and play nice with the Europeans, as their predecessors, New Democracy, once did. When Prime Minister Alexis Tsipras called for a referendum, its anti-austerity results served as a vindication of his party’s original position — but not for long. 

On the night of the referendum, European leaders responded with macabre statements about the country’s impending humanitarian crisis, and Finance Minister Yanis Varoufakis lost an internal government vote, forcing him to resign.

Then came a humiliating week for Greece, as Tsipras offered unexpectedly broad concessions and accepted a third dose of austerity to keep Greece solvent and inside the Eurozone. Online wags quipped that the referendum answer should have been amended to: “Yes, I agree to austerity,” or “No, I demand even more austerity.”

So what changed? The biggest factor was Brussels’ clear intent to expel Greece from the European Union. Ejection would mean an end to free movement within the bloc, and turn a wealthy and heterogeneous continent into a small, shattered and ageing country condemned to several more years of no growth under a harsh new deal.

German Finance Minister Wolfgang Schäuble had been gunning for a Grexit since 2012, according to former U.S. Treasury Secretary Timothy Geithner. In his memoir, Geithner recalled Schäuble telling him in a meeting that a devastating Grexit would prompt other members to cede more sovereignty in return for stronger banking and monetary union.

But instead of a theatrical expulsion, Schäuble achieved the same result during a marathon negotiating session by imposing such humiliating terms on Tsipras that he will be remembered as the man who signed the Greek version of the Treaty of Versailles.

Blame for this state of affairs is split between a reckless Greece that never quite understood Europe, and a Brussels for which the Greek saga could only ever be a success story if it was a cautionary tale. Syriza thought it could compensate for its small size and amateurish reputation by becoming an anti-austerity catalyst for parties across the Eurozone. Only over the past six months of dramatic maneuvering, the country was backed into a corner by a no-nonsense, German-led team of Brussels bureaucrats. Now, the country is finding that it is too small to wield influence — and not large enough to merit saving.