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.