‘EU would do anything to keep Greece in union’
RT:The president of the European Council has called an emergency eurozone summit on Tuesday. What can we expect from the negotiations?
Patrick Henningsen: This is important to stress right now at this point that this is only the first round of many rounds of negotiations and possible outcomes. This does give the government a mandate; in the short-term it gives the Syriza government a very strong hand in negotiations. But in the mid- to long-term, even this referendum [on Sunday] is going to be seen as insignificant for down the road. In that there is still a lot of things that can happen, there is not been a deal reached as such or some conclusive action whether Greece remains in the euro or not, so it is very early days.
RT:Will this result give the Greek government more leverage in negotiations?
PH: Yes, in the short-term it does. If it had gone the other way you can see how devastating that would be in terms of negotiations. So it is going in the favor of the Syriza government, which is great, and quite frankly this is why they have been elected in the first place. They are elected by the people. They are given a mandate when they came into power that they are going to stand up to what was classed as financial bulling or micromanaging by technocrats, the Greek society, not just the economy; the society through restructuring and various other debt restructuring, structure reforms, as they like to call them.
This government would stand up on behalf of the people against foreign bankers, and they’ve done just that. Now this is just the first part of the story. The next part is yet to be written, and we’ll see exactly how this plays out, because this could take a U-turn at some point down the road; the media campaign to demonize this government will continue they want to discredit this government; they want to get the people to clamor eventually for regime change. This is what you’re going to see down the road- a lot of negative press blaming the government for mismanaging this crisis, etc...
RT:What happens if the creditors say "No" themselves? Germany's Minister of Finance Wolfgang Schauble is already quoted as saying Tsipras has burned his bridges.
PH: That statement was made by that particular German person, but there is going to be a lot of criticism on the periphery that Greece should exit the eurozone and the situation is untenable, and things like this. But the fact of the matter is that at the center of the EU - there is no desire to lose Greece at all – they would do anything to keep Greece in the union. That is important, it is not just about integrity in the structure of the EU, it is about geopolitical and geostrategic aspects as well. If Greece was to leave the union they could fall into the arms of another power not far away, which would help to finance them through this transition or work on a joint pipeline project, someone like Russia for instance. Of course Washington and Brussels will do anything to keep that from happening.
RT:The Greek people have said ‘no’ to austerity. So what's next for the country itself?
PH: They’ve said no now, but this could change. If social unrest is instigated within Athens in the coming weeks and months it could be a very long summer. How long can people stand next to the government of Syriza; how loyal are they to this government, are they going to go the distance and do what’s right in the long-term; are they patient enough, will the media continue to demonize this government, and will public opinion shift against this government at some point. In other words, they could have this referendum now, but the austerity or restructuring program could be done through the backdoor. In exactly the same way we saw with the EU treaty, the backdoor eventually won the day, even though countries around Europe like Portugal or, for instance, other countries didn’t want the unifying treaty and came through the backdoor anyway. So this could happen here in Greece too.
EU struggle: Continue in neo-liberal direction or return to social democratic roots
Jack Rasmus, Professor of Political Economy: "The big struggle here is: will Europe continue in a neo-liberal direction or will it return to its social-democratic roots."
RT:As we've been seeing, the mood in Athens is one of celebration. What are the likely repercussions of this vote, do you think?
Jack Rasmus: Now that the Greek people have overwhelmingly rejected the last offer of the Troika, the ball is really in the Troika’s court. What happens next is that real negotiations will begin. The hardliners in the Troika have obviously been rejected here. Their whole idea was to drive Greece into default and maybe out of the eurozone. But now, I think, more likely the soft-liners will come forth and propose a new agreement that they probably had in their back pocket anyway before the vote. And that will probably take some form of offering to extend the debt from its current 20-year bound terms to 40 years which would reduce the payments of the Greeks, probably to reduce interest rates, restructure the debt in other ways, maybe ask for some concessions, taking concessions from the Greeks further. Last week the Greek government came much closer to the Troika’s position, and probably they should have negotiated it last week, but the hardliners prevented this. So I think what we’re going to see is a new round of negotiations- they are going to put something more on the table, and they’ll probably continue negotiating much closer than they are now. However, if they don’t meet then the hardliners are still in control.
RT:The banks in Greece remain shut and capital controls are in place. How long can Greece survive these conditions?
JR: They probably can go on for some time, several weeks, as long as the negotiations are continuing. If the troika refuses after Tuesday’s meetings to negotiate that’s the sign that what they are going to do is to put more pressure on the Greek banks and try to destabilize the Greek banks a little bit more and try to disrupt the political alignment in Greece, which is going to be very difficult now because of the vote and the support for the Syriza government. I doubt that’s going to happen, but it could still happen.
RT:What does the "No" vote mean for other eurozone countries suffering from austerity?
JR: The “No” vote obviously gives encouragement to others who are resisting continued austerity. The big struggle here is: will Europe continue in a neo-liberal direction or will it return to its social-democratic roots. Greece says: “Let’s go back to our roots where everybody is treated fairly.” The neo-liberals of course who are now running the show are saying: “No, now we need more austerity, labor market reforms everywhere in Europe.” But this certainly should give more impetus positive to Podemos and some of the rising left and right French parties to play a bigger role and to assert themselves.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.