CAMBRIDGE – Creditors and debtors have found
themselves at odds for as long as money has changed hands. But rarely have the
issues been framed as starkly – and in such a public manner – as in the just
completed Greek referendum.
In a vote on July 5, the Greek electorate
resoundingly rejected demands for further austerity by the country’s foreign
creditors: the European Central Bank, the International Monetary Fund, and the
other eurozone governments, led by Germany. Whatever the economic merits of the
decision, the Greek people’s voice rang loud and clear: We are not going to
take it anymore.
It would be a mistake, however, to view the
vote in Greece as a straightforward victory for democracy – despite what the
country’s prime minister, Alexis Tsipras, and his supporters like to claim.
What the Greeks call democracy comes across in many other – equally democratic
– countries as irresponsible unilateralism. There is, in fact, little sympathy
for the Greek position in other eurozone countries, where similar referendums
would undoubtedly show overwhelming public support for the continuation of the
austerity policies imposed on Greece.
And it isn’t just citizens of the large
creditor countries, such as Germany, who have little patience for Greece.
Exasperation is especially widespread among the eurozone’s poorer members. Ask
the average person on the street in Slovakia, Estonia, or Lithuania, and you
are likely to get a response not too different from this one from a
Latvian pensioner: “We learned our lesson – why can’t the Greeks learn the same
lesson?”
One might argue that Europeans are not well
informed about the plight of the Greeks and the damage that austerity has done
to the country. And, indeed, it is possible that with better information, many
among them would change their position. But the forces of public opinion on
which democracies rest rarely take shape in ideal conditions. Indeed, one need
look no further than the Greek vote itself to find an example of raw emotions
and outrage winning out over a rational calculation of economic costs and
benefits.
It is important to remember that the creditors
in this instance are not a bunch of oligarchs or wealthy private bankers, but
the governments of the other eurozone countries, democratically accountable to
their own electorates. (Whether they did the right thing in 2012 by lending to
Greece so that their own bankers could be repaid is a legitimate, but separate
question.) This is not a conflict between the Greek demos – its people
– and the bankers, as much as it is a conflict between European
democracies.
When the Greeks voted “no,” they reaffirmed their
democracy; but, more than that, they asserted the priority of their democracy
over those in other eurozone countries. In other words, they asserted their
national sovereignty – their right as a nation to determine their own economic,
social, and political path. If the Greek referendum is a victory for anything,
it is a victory for national sovereignty.
That is what makes it so ominous for Europe.
The European Union, and even more so the eurozone, was constructed on the
expectation that the exercise of national sovereignty would fade away over
time. This was rarely made explicit; sovereignty, after all, is popular. But as
economic unification narrowed each country’s room for maneuver, it was hoped,
national action would be exercised less frequently. The Greek referendum has
put perhaps the final nail in the coffin of that idea.
It need not have been this way. Europe’s
political elite could have framed the Greek financial crisis as a tale of
economic interdependence – you cannot have bad borrowers, after all, without
careless lenders – instead of a morality tale pitting frugal, hard-working
Germans against profligate, carefree Greeks. Doing so might have facilitated
the sharing of the burden between debtors and creditors and prevented the
emergence of the us-versus-them attitude that poisoned the relationship between
Greece and the institutions of the eurozone.
More fundamentally, economic integration
could have been accompanied by the expansion of a European political space. Compensating
for reduced national autonomy by creating room for democratic action at the
European level really would have been a victory for democracy.
It is too late to debate whether the culprit
was the unwillingness of the European public to embark on the path toward
political union or the timidity of its national politicians to exercise
leadership. The consequence is that in today’s Europe, democracy can be
reaffirmed only by asserting national sovereignty. And that is what the Greek
electorate has done.
The referendum is deeply important, but
mostly as an act of political symbolism. What remains to be seen is whether the
Greek public also has the stomach for the economic actions – in particular, an
exit from the eurozone and the introduction of a national currency – that real
sovereignty would entail. After all, the terms on offer from the country’s
creditors are unlikely to change much. If the Greeks voted “no” based on
unrealistic expectations that other eurozone democracies would be forced to
bend to their wishes, they may be in for another deep disappointment – and
their own lesson in democracy.
