Greece: Defence of democracy

Note kindly translated by Anne-Marie de Grazia

The decision to exclude Greece from a reunion of the Eurogroup, qualified as informal after the fact, on Saturday, June 27th represents the equivalent of a coup de force by the President of the Eurogroup, M. Jeroen Dijsselbloem. It is an unheard of action which violates the spirit as well as the letter of the treaties of the European Union. The absence of reaction from the other participants is just grave. This day was a very dark day for democracy. On Sunday 28th, pressures on Greece resumed. The coming days took could turn out to be dark for democracy in Europe as well as in Greece. We must measure the reach and consequences of this event.

What facts are

The reality of the facts is that M. Dijsselbloem asked, during the reunion of Saturday 27, the Greek Minister of finance, M. Yanis Varoufakis, to leave the room. The Eurogroup published a communiqué without the agreement of the Greek Minister, which follows:

Official statement of the Eurogroup

A - Eurogroup Statement

This communiqué carries in a footnote the indication that this text represents the opinion of all the members except the Greek party. The position of the Greek party is in no way evoked, as is done in practice (what is called a « minority position »). Several remarks must be made at this point:

  1. If the reunion was, as M. Dijsselbloem said, an informal reunion, why did it give matter to a communiqué ?
  2. If this reunion was not informal, by what right was the Greek Minister excluded from it, and by what right does his position go unmentioned in the communiqué ?
  3. The Eurogroup is an « informal group » within the framework of the institutions of the European Union. But it is acting in delegation of the European Council, of which it takes up some attributions. From this point of view, it is held by the rules, explicit as well as tacit, which are those of the Council.
  4. Dijsselbloem’s decision constitutes therefore a characterized abuse of power, an action which could be judged illegal, be it before the European Court of Justice or before the International Court in The Hague. It is unheard of that M. Dijsselbloem took such a decision. But it is just as unheard of that the other Ministers present did not react. From this point of view, the position of Michel Sapin, the French Minister of finance is perfectly incomprehensible. He cannot in the same time pretend that “Greece is still part of the Economic and Monetary Union” and take part, as he did on Saturday, June 27th, in a reunion from which the Greek Minister was excluded. There is a contradiction in this which cannot be remedied. Let us be reminded that, in case the decision of M. Dijsselbloem were condemned legally, all the Ministers who took part in this reunion could be sued for complicity in an abuse of power.


The position of Yanis Varoufakis

On his blog[1], the Greek Minister of finances gives very clearly the reasons for which he did not accept the proposals of the Eurogroup, as well as the reasons which induce him to think that these proposals constituted in reality an ultimatum. The text of the declaration, which has not been contested by the other members of the Eurogroup and which can be considered to be authentic, shows that one was in presence of a perfectly articulated economic reasoning. The arguments advanced by M. Varoufakis are totally serious and he has received the support of several economist of international reputation (such as Paul Krugman and Joseph Stiglitz).

It is always possible to dispute elements in the logic of Varoufakis. But to do this, one must situate oneself on the same level as he. We are forced to recognize that this is not the case with the so-called “proposals” formulated by the Eurogroup. In reality, the latter never took up the question of the economic development of Greece, but only the ways and the procedures by which to continue to extort from this country payments which it cannot make. The Eurogroup has indeed followed a political logic, and not an economic one. Therefore, the break-up between Greece and the Eurogroup takes a completely different dimension from a conflict between a debtor and his creditors. What is at stake is the soveignty of the Greek people. The break-up did not occur on economic questions, but on the assessment that the European Union is forthwith applying the equivalent of the « Brezhnev doctrine» of limited sovereignty, which had been expressed at the occasion of the intervention of the states of the « Warsaw Pact » in Czechoslovakia in August 1968.

It really tops it of that, whereas the European Union is draping itself in the « defence of democracy » for example in Ukraine (opportunistically forgetting the role of fascist militias aiding the Kiev government) it is trampling in the coldest, clearest manner that same democracy when it comes to Greece. This will be a lesson to remember. June 27th 2015 may well become, in many people’s mind, the equivalent for the European Union of the Soviet intervention in Czechoslovakia, which contributed a lot in discrediting the Soviet regime and precipitated its fall 20 years later.


Changing position of the ECB

In such a context, the decision of the European Central Bank to maintain at the same level the liquidity assistance which it provided Greece (and which is called ELA) became the trigger for the events of the evening of Sunday, June 29th. Faced with considerable exits of capital since last January, the Greek banks are indeed vitally dependent on the aid program of the ECB. Exits have accelerated in the past days. The announcement of maintaining ELA at its same level was equivalent to threatening the banks with a penury in liquidities in the short term.

Declaration of the ECB on its cooperation with Greece


The Greek government therefore has been forced against its will to put in place a control of capitals and to put the banks « to sleep » for a week. This is a decision of extreme gravity and it could render the holding of the referendum without effect if it ended up, in fact, in acting out the default and the expulsion of Greece from the Eurozone. It seems that the Greek government resigned itself to this logic despite the declarations it made on Saturday and Sunday.

But this decision also reveals the violence of the black-mail exerted upon Greece by the creditor countries. It will have to be remembered in due time.



Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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