Oxi & Nai: Greece and Financial Power (A Guestpost by Paul Tyson)

Last updated on: July 26, 2015 at 10:35 pm by Matthew Tan

Oxi & Nai: Greece and Financial Power (A Guestpost by Paul Tyson) 2015-07-26T22:35:00+10:00 Matthew Tan

LOGO Patheos Explore the world's faith through different perspectives on religion and spirituality! Patheos has the views of the prevalent religions and spiritualities of the world.

Dr. Paul Tyson, who is Honorary Professor in the Department of Theology and Religious Studies at the University of Nottingham has recently published an important essay on ABC Religion and Ethics Online on what the recent Greek financial crisis exposes about the state of political power and the place finance plays in those power plays. He has closely followed the Greek crisis and provided his own breakdown of the chain of events.

What seems to be at the heart of Tyson’s analysis is a clash of narratives between that peddled by the mainstream media, and the political machinations of financial interests. Indeed, the economist Joseph Stiglitz, as interviewed on the Al-Jazeera news agency, claimed recently that the recent bailout deal is not a bailout of Greece per se, but German banks and other creditors.

After speaking to Tyson, The Divine Wedgie has reproduced below his essay as published on the ABC.

Oxi and Nai: What the Greek Crisis tells us about Financial Power and Politics

The referendum held on 5 July 2015 asked the Greek electorate whether they were prepared to surrender the anti-austerity policy agenda of their Syriza-led government in order to secure more loans. The Greeks answered with an emphatic – “No!”

Prior to the referendum, Yanis Varoufakis (the then Minister for Finance) argued that the stronger the No vote, the more bargaining power the Greek government would have with her creditors to seek a viable re-structure of Greece’s debt. Surely, Varoufakis seemed to believe, the Eurogroup would not ride rough shod over an expression of political will of a sovereign European state.

Varoufakis also claimed that the refusal of Eurozone financial institutions to extend normal operational terms to the Greek banks for the week prior to the referendum was an overt act of national intimidation, intended to influence the outcome of the referendum towards a Nai or “Yes” vote.

Before the referendum, Prime Minister Alexis Tsipras also urged the Greek people to vote No as a display of national pride in the face of the creditors’ demands for humiliating and damaging austerity terms.

It now seems clear that Prime Minister Tsipras was not, in fact, expecting the No vote to win. For immediately after the referendum, and with Greek banks under siege from their European creditors, Tsipras entered negotiations with Eurozone financial institutions in Brussels – the troika – thereby abandoning his anti-austerity agenda in a desperate attempt to secure another bailout package for Greece.

As Tsipras saw it, he had no choice but to act thus, whatever the Greek people said, for if he could not secure a further loan from the troika the Greek banks would fail and Greece would be pushed out of the Eurozone into financial chaos and, possibly, into social and political anarchy.

So less than two weeks after the decisive Oxi (“No”) vote, the Greek Prime Minister persuaded the Greek parliament to say an emphatic Nai (“Yes”) to the devastating terms of surrender mandated by the troika, which entailed more far reaching austerity measures than Greece had ever experienced before. Tsipras abandoned Syriza’s original policy as politically untenable, even though two weeks prior over 60% of voting Greeks made it clear they backed their government’s policy.

What is really going on here?

Watching this drama unfold in the mass media, an easy-to-digest morality tale is often presented to us. It goes something like this. The Greeks are – let us be frank – economically unproductive; they don’t pay their taxes; their government must have done something fundamentally irresponsible to be in such massive debt; any way, everyone knows that Greece’s institutions are riddled with cronyism. What we are now seeing is the Greek state, having has maxed out its credit card, took out a high-interest loan to pay off its debts, but cannot make its repayments and doesn’t want to be liquidated. Consistent with this purported refusal to face the consequences of their own indiscretions, the Greeks elected Syriza in January this year to bargain with their creditors, in the hopes that they could somehow pull off a deal with the troika that would let them off the hook.

Unsurprisingly – so the story goes – the wealthy and industrious Germans refused to negotiate any such debt restructure with Syriza. While the 5 July referendum indicates that the Greeks do not accept the austerity terms upon which any further loans are predicated, those loans are necessary in order to keep their banks open (so that they can continue to “service” unpayable and ballooning public debts with a shrivelling economy subjected to higher taxes, the sale of all state assets, reductions in meagre pensions for the old, and even more meagre support for the 25% of the workforce now unemployed). The No vote is thus inconsequential. The reality is that whoever has the money has the power, and the creditors are being very generous to Greece to bail them out at all. So Prime Minister Tsipras was simply acquiescing to the inevitable and the Greeks should stop complaining, accept reality, and work their way out of their debt troubles.

You may have noticed the bracketed section in the above paragraph. I put it in brackets because, while it is a well-known part of the public story about Greece’s current situation, it is, necessarily, bracketed out from the easily digestible morality tale of Greece’s irresponsible desire to escape austerity and the assumed fiscal rectitude of the Eurozone creditors. The fact is, morality has nothing to do with what is really going on between Greece and the troika.

What we are witnessing instead is the result of the impossible economic architecture of the Eurozone and the fruits of the determination of Europe’s dominant financial powers to retain control of the banking sector so as to protect their own interests, whatever the consequences to the struggling economies of southern Europe. This is a clear case of finance determining politics and the mass media largely supporting the status quo by framing this situation in simplistic moral terms.

This tendency for finance to be the real centre of power, for financial power to be politically and socially unaccountable and for finance to have little regard for nationally framed economic realities, is not something restricted to Europe. Even so, in Greece we see it in very stark terms.

What that is most tragic, however, is that Syriza provided Europe with a unique opportunity sensibly to moderate the unaccountable nature of financial power, and to discipline merely financial power by making it accountable to basic economic and social realities. By crushing Syriza’s attempt to negotiate a realistically viable debt restructure, Europe will unlikely get this opportunity to re-work an unworkable system again.

If something is not done to mitigate financial power with social, political and economic realities, the sad truth is, destruction is on its way to Europe. Ironically, finance is ultimately dependent on real economies and social stability, so the interests of finance can only be properly advanced by reconnecting financial power with social, political and economic reality.

If Wolfgang Schauble thinks he will secure German financial interests by either crushing Greece or ejecting them from the Eurozone, I fear that history will show him to be profoundly wrong.

economics

Previous Post

July 17, 2015

The Media as Liturgy

Next Post

August 2, 2015 On Death and Pies

Browse Our Archives

Select a Category architecture art Augustine Belloc Benedict XVI bible blogs books bourgeois Christianity Campion College Chesterton Christianisation Church and Culture Church Fathers citizen conference conservative consumer culture cybernetics Desert Fathers discipleship distributism drinking ecclesiology economics education environment Evagrius of Pontus formation Foucault George Weigel Girard Graham Ward http://schemas.google.com/blogger/2008/kind#post interfaith Jacques Ellul John Chrysostom Julia Kristeva Latin liturgy mall marriage monasticism Music Narrative news philosophy polis politics pop culture postmodern city postsecular prayer prostestant quote Quotes Radical Orthodoxy resources Rome Rule of St. Benedict saint Saints secular sociology theological anthropology theology transcendance Uncategorized videos William Cavanaugh

Select a Month December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 September 2016 August 2016 July 2016 June 2016 May 2016 April 2016 March 2016 February 2016 January 2016 December 2015 November 2015 October 2015 September 2015 August 2015 July 2015 June 2015 May 2015 April 2015 March 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 October 2009 February 2008 December 2007 October 2007 September 2007 August 2007

TAKE THE

Religious Wisdom Quiz

What is the longest book of the Bible?

Select your answer to see how you score.

Numbers Psalms 2 Chronicles Genesis