The Moral to the Greek Story: Democracy has no Role in EU Politics

We have been loathe to comment on the Greek pantomime for the last two or three weeks since, as this blog noted way back on June 22, the debt negotiations had everything to do with politics and nothing to do with finance nor economics. We are not political scientists. Now that the current Greek chapter is pretty much a wrap, it is nevertheless worth reflecting on what has transpired

The debt negotiations were ambling along quite nicely from a political standpoint, while the June 30 debt payment seemed to be the deadline for a short-term compromise that would suit all parties and relegate the issue back to page 38 of the Financial Times. This all got derailed when Mr Tsipras on June 25 decided to call a referendum to gauge the opinion of the Greek people who, on July 5, rejected the EU/ECB/IMF proposed debt extension conditions

At the time, the referendum result was hailed by many as an act of political genius. But, oh dear, Mr Tsipras had only managed to make a lot of powerful people very angry. The delicate balancing act of negotiating among 22 member states had been jack-knifed by Tsipras who decided to put the question to his people. The EU’s leaders viewed this as far more of a threat to their governing process than losing a couple of hundred billion Euro by kicking Greece out of the club. Imagine what a mess the EU would be if every government decided to hold a referendum on any issue that they disagreed with? The EU powers that be had to stop this in its tracks! So they decided to kick him out unless he agreed to their conditions

And so Tsipras found himself politically weakened, despite his democratic mandate, simply because he stepped outside the political rules. His government is in mutiny and he now has to appeal to the conservative opposition to pass the legislation needed to remain in the EU. Worse still, his grip on power appears tenuous and new elections may have to be called where he will suffer a humiliating defeat. Seven days after being hailed as a ‘political genius’, he now looks like a ‘political dunce’

The moral to the story: democracy has no role to play in EU politics