The economic MAD – a new Greek doctrine in the times of crisis

MARTA MAKOWSKA

On 17th June Greece holds parliamentary elections which will make a second attempt to form the government after none of the political parties were able to reach compromise following May elections. The latest opinion polls show, that radical left party Syriza (“Coalition of the Radical Left”) has taken the lead from previous winner – moderate centre right New Democracy. The unexpected twist has been observed after Syriza’s leader, Alexis Tsipras, announced his remedial plan to Greek voters. 

Tsipras assured his citizens, that under rules of his party Greece will cancel the bail-out agreement introduced by the Lucas Papademos’es government of national unity. Austerity measures on which his predecessors agreed to save the country from going bankrupt are, in his opinion, unnecessary. His ways of tackling the problem would be (among others): withdrawal of cuts to the minimum wage, halting privatization of state enterprises and even reversing privatizations already conducted. He also proposes nationalization of banks which benefit from the state support and adoption of a wealth tax for the richest. He claims, that pulling back from austerity measures is possible, as European countries cannot afford exit of Greece neither from the Euro zone nor from the European Union. And this is where the MAD* doctrine may be applied.

*The nuclear doctrine of Mutual Assured Destruction (MAD) was introduced in mid 1960s as a subversive guarantee of safety in the world dominated by two nuclear powers. Both their unwillingness to destroy civilizations and nuclear capability was a deterrent against nuclear war. Likewise, current situation of Greece is determined by two factors.

On the one side we have strongly dissatisfied (if not furious) voters who have suffered from job losses and wages cuts throughout last two years and who, by all means, would like to see immediate effects of already introduced (without their acceptance) austerity measures. Their patience, after May’s elections is already impaired: for this reason Syriza party has recently gained votes not only among radical leftists, unemployed or immigrants, but also among middle aged working class which does not trust neither moderate reformists representing their own country, nor distant EU officials threatening their sovereignty. On the other side of this tragic picture, European political leaders spare no effort to maintain status quo of the Euro Zone’s order, even if this involves risky game with Syriza’s leader.

Both sides of this game are balancing on a very thin line, which may eventually cause a collapse of whole euroland unless both parties reach the consensus and decide upon measures adequate for this particular state. If Alexis Tsipras emerges to become next Greek prime minister throughout the democratic elections, Europe, concerned about the future of the whole Euro Zone must come up with feasible solution for this country’s economy and society, as elections of June 17 are not only about the internal Greek matters – they are about European Union citizens’ consent to external regulations and European solidarity in difficult times of crisis. Shall this lesson be disregarded, other national politics in different states may follow Greek doctrine of MAD.