The election of the leftist Syriza-led government in Greece is potentially a turning point in the history of the EU. The Mexican standoff between Greece and its bailout creditors is just one manifestation of a profound challenge: how does Europe’s political, economic and security architecture withstand the election of a government that refuses to play by the rules?
First, it is clear that the debt standoff threatens the existence of the euro. It is to be hoped that both Syriza and the lenders (in particular, Germany) will show more flexibility than their public statements suggest. As this game plays out, Syriza can hold the EU to ransom on foreign policy by threatening to break the Union’s fragile consensus on Russia and Ukraine.
A senior source in the European Parliament says that there is now a fear that Greece will 'auction its veto' between the EU and Russia, with re-negotiation of the bailout in the background. Yesterday the EU’s Foreign Affairs Council held an emergency session on the increasing Russian aggression in Ukraine, which resulted in a frankly lame statement that carried no practical measures whatsoever. There is little doubt that the presence of the new Greek foreign minister, Nikos Kotzias, made the rest wary of proposing new sanctions, for fear that he would veto them. When sectoral sanctions come up for renewal in July, Greece will have the power to revoke them by veto.
Behind this is the assumption that Russia will step in with an offer of financial aid for Greece, if it agrees to wreck the EU’s sanctions regime. Just yesterday Russia’s finance minister Anton Siluanov said this on the subject: ‘Well, we can imagine any situation, so if such [a] petition is submitted to the Russian government, we will definitely consider it, but will take into account all the factors of our bilateral relationships between Russia and Greece, so that is all I can say. If it is submitted we will consider it.’
While Russia is undoubtedly short of hard currency, the economic and propaganda benefit of seeing EU sanctions reversed could make it a 'rational transaction' to give Greece billions of euros. If this were to happen, states such as the UK, Germany and Sweden would probably jointly impose similar bilateral sanctions that would have much the same effect, but the door would be open for wavering states like Italy, Hungary and Austria to resume normal trade with Russia.
The implications for NATO are equally worrying. The bedrock of the Alliance is Article V, which states: ‘The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.’ However, for Article V to be invoked, there must be unanimity among all 28 members of the Alliance. If Greece does indeed choose to become a client of Moscow, then it is not hard to imagine its government using its veto to prevent NATO action to defend Estonia or Poland against Russian aggression – especially if that aggression were of the vaguely deniable sort seen in Ukraine. Again, the US and other allies could act outside of NATO, but it would be clear to the world that the Alliance was finished. On top of this, Syriza promised in its manifesto to leave NATO, which would present different problems; neither option is appealing.
This orientation towards Russia is of course more than a negotiating tactic. It has deep historical roots, but is also a part of Russia’s effort to bolster extremist political forces in Europe in order to spread division and disaffection.
The new Greek foreign minister Kotzias is close to Alexander Dugin, a Russian nationalist demagogue with close ties to Putin. Dugin’s ‘Eurasian’ ideology foresees a weak and divided Europe prised away from the US as a Russian client. In December the Russian opposition hacker group Shaltai Boltai released messages allegedly from he email account of one of Dugin's lieutenants in his 'Eurasian Movement', Georgy Gavrish. Yesterday RFE/RL reported:
Several dozen of the e-mails reveal conversations between Gavrish and people inside Syriza, says Christo Grozev, a media investor and blogger specializing in information issues in eastern Europe.
The messages show "very close cooperation on strategy, on PR, and so on," Grozev says. He says that Syriza consultants would send "strategic memoranda" on party positions and policies to Dugin and Gavrish for their comments and suggestions.
Gavrish lived in Greece for several years until about 2013. "Over those five years, he [Gavrish] served, apparently, as a proxy for Dugin to find like-minded or susceptible politicians and public figures in Greece to engage with Dugin's ideology of Eurasianism versus Atlanticism," Grozev says.
One of the people involved in the exchanges is Nicolas Laos, a Greek intellectual and Syriza adviser with business ties to Russia. He is a partner of the Russian corporate-security firm R-Tekhno.
In one leaked e-mail, Laos writes to Dugin, "I know very well how the enemy works, and, under your patronage, I can strike back effectively and hard."
The full RFE/RL report, which makes for a gripping read, can be found here:
Distasteful and bizarre as all of this is, the fact is that Greece is now in a rather strong position. So the question is, how to deal with it?
First, it might be sensible to accept that the complaints of millions of Greeks are reasonably founded. Greece got into this mess of debt and economic collapse because its leaders and the bureaucrats in Brussels colluded to cook the books so that it met the single currency’s convergence criteria. Having failed to carry out the necessary structural reforms and anti-corruption measures, Greece was then locked into a currency and central bank policy designed to fit the needs of Germany. At the same time, interest rates plummeted and the government, companies and consumers plunged into an orgy of debt. Why did the EU – and in particular the Germans – bring about and tolerate this situation? In order for a rather vain political dream of a continent-wide currency to be realised. The Germans, the French and the rest of the euro states are at the very least co-conspirators in this vast self-deception.
The result today is that Greece has endured an appalling economic collapse and is now supposed to bear unending austerity and to service debts that it may never be rid of. In a Financial Times leader at the weekend Martin Wolf wrote; ‘ Greece’s predicament may ultimately force creditors to the negotiating table. To service its debt burden would require Greece to operate as a quasi slave economy, running a primary surplus of 5 per cent of GDP for years, purely for the benefit of its foreign creditors. Even the IMF has dropped hints in favour of some debt forgiveness.’
For many Greeks this is a continuation of what they see as soft colonialism. In 1944 Churchill, Roosevelt and Stalin struck a rather perverse deal whereby Greece, where there was great popular enthusiasm for communism, was shoehorned into the West. Meanwhile Romania, Poland and other conservative countries in Central Europe were abandoned to the mercies of Stalin. Churchill, with understatement, called it the ‘naughty document’. During the Cold War the Greeks, noted as irredeemable reds, were kept in line by the vile regimes of the Colonels, with enthusiastic support from the Americans. Should anyone be surprised that leftist sentiments, long sublimated by the Greeks, have risen to the surface at this point?
Given the longstanding fraternal ties between the Orthodox cultures of Russia and Greece, it is therefore natural that Greece should look to Russia, and that Russia should see an opportunity in Greece (and in Cyprus).
In short, the Greek people have some real grievances, and in their exasperation have elected a government that promises radical, if perhaps misguided, solutions. If Germany and other northern European states do not relent, then a victory for small-town financial propriety will be won at the expense of a strategic defeat. If Russian prevails in Greece, then there is a real threat of it consolidating its influence in Bulgaria, Serbia, Montenegro and the Serbian part of Bosnia. So Greece should be allowed off the naughty step and forgiven much of its debt, not least because its creditors are at least as much to blame for the whole sorry situation.
It should be made clear that this European show of solidarity with Greece needs to be reciprocated: Greece cannot make good on its threat to go into the Russian camp.
On the question of NATO, such latitude is harder to justify. Russia poses a dire threat to European security and no question over NATO’s unity can be allowed to fester. The very possibility of a Greek veto over Article V undermines the Alliance’s deterrent power and will itself provoke Russia to further aggression. In this case, should Syriza follow through on its pro-Moscow rhetoric, the Alliance should consider temporary suspension from membership.
Working out how to deal with rogue NATO members is anyway worth doing as extremist and populist parties gain further popularity in Europe. In 2017 France will hold a Presidential election, which the Russian-financed National Front is in with a chance of winning. The sooner the EU and NATO work out how to deal with such a result, the more containable it will be.
Neil Barnett runs Istok Associates (www.istok.co.uk), a corporate intelligence consultancy, and is a Research Fellow at the Centre for Policy Studies