Greece blinked in loan battle, Putin’s gaze remains steely

February 20, 2015
Varoufakis holds a news conference after an extraordinary euro zone Finance Ministers meeting in Brussels

Greek Finance Minister Yanis Varoufakis holds a news conference after an extraordinary euro zone finance ministers meeting in Brussels, Feb. 20, 2015. REUTERS/Yves Herman

The European Union is now a thing of shreds and patches.

Its policies and projects are being shredded, and it seeks, not to find solutions to the crises consuming it, but to patch them up, and hope.

The patch which was the Minsk agreement of last week is now flapping in the wind. The fighting never stopped: the separatists and their Russian allies simply continued to roll back a demoralized Ukrainian army from Debaltseve, the town they had surrounded before the agreement and took after it.  On Friday, the Kyiv Post was reporting that separatist and Russian military units were moving down toward the port city of Mariupol, which sits across the direct land route from Russia into its new appendage of Crimea. If that’s taken, then the Donbas area and Crimea can be fused together into a new Russian state, shredding Ukraine further.

The Russians have become much bolder about their involvement, scarcely bothering to disguise their contempt. Vitaly Churkin, the Russian ambassador to the United Nations, slapped down Ukrainian President Poroshenko’s suggestion that international peacekeepers be brought in to police the ceasefire, saying it “raises suspicion that he wants to destroy the Minsk accords.” Of course, Churkin’s government has already destroyed them. The Moscow daily Kommersant interviewed a group of young Russian soldiers, part of a detachment near Debaltseve: the report said, “The young soldiers’ role in military operations was to perform combat missions on behalf of either the self-proclaimed republics, or ‘separate regions of Donetsk and Lugansk region’ (as is written in the Minsk agreement). They know how to fight.”

When Debaltseve was taken, Russian President Vladimir Putin joked, “It’s always tough to lose.”

The disarray within Europe on Ukraine does not get better. A report from the British House of Lords was harsh on the UK, and Europe in general, for “sleepwalking” into an attempted agreement with Ukraine which would have seen it enfolded into Europe, out of the Russian sphere, without thinking through the likely Russian reaction.

This is probably right: yet even if no one in high authority grasped how momentous were the stakes, the EU — and the West as a whole — has no choice but to confront Russia now. It hasn’t, though: the patches are still being applied. Russia advances, European ministers fret about attacks on the tiny Baltic states, all three both NATO and EU members. No one knows the limits to Putin’s ambitions, though the best-informed commentators believe them to be large. For the moment, in any case, he is in the saddle.

The second crisis — the crisis within — that of Greece, on Friday evening inched toward the application of another patch. Faced with finance ministers of the euro zone who had, in many cases, swallowed great draughts of austerity and struggled to meet the conditions for loans and bailouts, Greece had backed down substantially.

The statement from their meeting was framed to be upbeat and optimistic: but had two large necessities embedded in it. One was what Jeroen Dijsselbloem, the Dutch finance minister and chairman of the euro zone ministers group called the “recovery of trust” — actually, the creation of a trust that was never there — between the Greek government and the other European states. The other was a tight ultimatum: that Greece produce, by Monday, a credible and substantial list of reforms it is prepared to undertake — which, if approved, will mean that the current financing program will be extended by four months (the Greeks had asked for six).

Is this a better quality of patch? Here’s why it might not stick through the weekend.

The Greek government had mounted a spirited but adolescent defiance of the EU, of the International Monetary Fund and the European Central Bank — the “troika” — which had tied the loans reforms. It promised its electorate (among much else) to raise wages and re-employ thousands of public-service workers.

In his speech last week to the Greek parliament, Prime Minister Alexis Tsipras said, “the bailout failed. We want to make clear in every direction that we are not negotiating. We are not negotiating our national sovereignty.” And, to rub a little more salt into the flesh of a Germany that the new government never fails to remind of its Nazi past, the prime minister promised he would seek World War Two reparations.

The Greeks have made much of the fact that they have a democratic mandate to get what they want from Europe.

One of the first questions to the Dutch finance minister, after he had presented the agreement to the press, echoed that mandate point “Have you not trashed Greek democracy?” the reporter, who was not Greek, asked.

Dijsselbloem, a suave operator, patiently explained that Greece was part of a community of governments, each with a different mandate, each with a stake in the euro and in ending the crisis — and thus the mandate of one could not override the judgments of all the rest.

It was a precious point. Greece’s new government was never in any shape to make the demands it did. Now, if its U-turn is genuine, it has the chance to do what should have been its first posture: to draw the EU partners into a cooperative effort to tackle not just the debt, but the underlying issues of corruption and public sector reform, changes which must be made over an extended period if the state is to get real and sustainable growth in the future. With such an effort, it could find — Christine Lagarde, head of the IMF stressed it at the press conference — flexibility and understanding. Instead, it has wasted a month in posturing.

And therein lies the largest reason why this all may fail. Syriza, deliberately and cynically, raised high the hopes of a population badly battered by austerity, unemployment and public service cuts — and now must return to that electorate to say that the promises mean very little. How far it will be able to keep the trust of its supporters and of the population as a whole while striving to win that of its European partners is the central question of the next days, in which it must commit itself to continuing, hard reform. The patch has been prepared. But it may not stick.

3 comments

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Angela Merkel has let the EU walk all over Germany Again. Grease is just another America full of debt and drugs

Posted by betrayed | Report as abusive

“though the best-informed commentators believe them to be large”

Are you joking? As if commentator opinion has any merit? Perhaps his ambitions are larger now due to the miscalculation of bringing NATO up to his doorstep and instigating an overthrow of a democratically elected (albeit corrupt) government.

Posted by mgunn | Report as abusive

A well reasoned sensible article (welcome back) The point below from mgunn is the reason why we are in this mess. The EU US could not wait to achieve control of Ukraine via the ballot box, this would have taken up to 5 years hence the problems we now have. I agree that no one knows the expansion plans that Putin had, but these would not have been implemented in my view until at least 2018. This date would now have moved due to economic problems oil price ETC. The problem now is that because of sanctions and the rhetoric from the west all bets are off and I believe that we are now heading for a war. A war that Russia did not want or is prepared for, but will now feel is its only way out. As for Greece there are only two options stay with the German austerity plan or default and become bankrupt. The Greek people have had enough and will force the latter option.

Posted by Moties001 | Report as abusive