Can Europe Make It?

Grexit to Brexit: “Be careful what you wish for!”

There is an ironic parallel in the methodology of emotion and national dignity employed by both the left-wing Syriza in Greece and the right wing leave camp in Britain.

Othon Anastasakis
10 June 2016

Boris Johnson and Michael Gove stand together during a Vote Leave rally. Isabel Infantes /Press Association. All rights reserved.A year ago, the EU was preoccupied with the possibility of Greece’s exit from the eurozone and a snap referendum proclaimed by the Greek government for or against a memorandum, incorporating the latest version of an austerity agreement with its creditors.

The Greek referendum held on July 5, 2015 was the final chapter of over six months of largely fruitless negotiations between the recently elected left wing government of Syriza and the Troika (ECB, IMF and European Commission). In practice, voting Yes to the memorandum meant the survival of Greece in the eurozone under strict austerity rules, while voting No would eventually lead to default in the country’s payments and exit (temporary or permanent) from the euro area.

The Greek government vociferously supported the No campaign. Partly as a consequence of this, the majority of Greeks (61%) voted No to the memorandum but the Greek government, faced with the prospect of bankruptcy and economic collapse, was then forced to agree to an even tougher version of the agreement.

A year later, the UK population is called upon to vote to remain in or leave the EU. While the Greek and the UK referenda bear no obvious resemblance and the two countries have a different impact on the EU, nevertheless there are some interesting links between the two instances.

To begin with, there have been numerous references to Greece during the UK campaign and the rhetoric of the leave camp in particular has made extensive negative use of the Greek example; then, there are some similarities between the two cases, especially between the No camp in Greece and the leave camp in the UK; last but not least, there are even some lessons from Greece for the British experience, in terms of what can be expected to happen in the future.

The references

Greece’s example has appeared several times in the pre-referendum discourse and most prominently in that of the leave camp. The latter is keen on using the Greek case because it suits its argument for Brexit in three distinct ways:

- First, the leave camp likes to portray Greece as the par excellence victim of an undemocratic EU, by arguing that crisis-ridden Greece has lost its national sovereignty and the country is run by unelected bureaucrats from Brussels. The leave camp laments the fact that the government of Greece has practically lost its power to decide on important domestic matters, as a result of an increasingly interventionist EU. Would they want the same to happen to Britain?

- Second, Greece, as a bailout case study, is anathema to the leave camp because it proves that the EU resorts to bailouts all too easily, which is something that Britain fundamentally objects to and would never wish to be part of. From a different ideological perspective, the Greek economic situation alienates the anti-austerity left wing leave camp in Britain, who see Greece’s misery as a result of German and EU-dictated anti-social austerity policies.

- Third, Greece is the actual source of unwanted economic migration which sought economic refuge in Britain, among other northern destinations, during the eurozone crisis years and beyond. This argument resonates effectively with the anti-migration obsession of the leave camp which fears rising numbers of refugees and economic migrants from various parts of the globe.

The similarities

So far, the comparison between the two potential exits has been understood in the context of the likely damage that they can cause the EU. No one can claim with certainty whether Grexit or Brexit would be worse, but there is a genuine fear of further disintegration in the eventuality of one and/or both exits. Beyond this generic linkage, there are some interesting, almost paradoxical, similarities in the way that the two referenda have been conducted in the two countries.

To begin with, in both cases, the referenda were decided for internal party purposes, in order to keep the unity of the government and the party in power. From the start as party in government, Syriza was tormented by divisions between the pro- and the anti-European camps. Following its dilatory negotiations with the Troika, many prominent members within Syriza found themselves unwilling to comply with any austerity agreement, at which point Prime Minister, Alexis Tsipras, decided to declare his snap referendum and surprise everyone. In the case of Britain, the decision for the referendum was not as unexpected but, similarly to the Greek case, the Prime Minister’s commitment in principle was made under pressure from his party backbenchers during the early years of the first mandate of the conservative party in power in 2012. Once re-elected in 2015, David Cameron was forced to set a concrete date. There is no doubt that the real reason behind the “in or out” UK referendum has to do with internal conservative party politics and the damage that the rising UKIP can do to the party.

Secondly, as with the Greek case, the British referendum has no supporters in Europe and threatens to put Britain on a collision course with the EU. In Syriza’s case, despite advocating a more popular No campaign to austerity, the Greek government in the months leading to the referendum, found itself completely isolated in the EU, even among its more natural partners in southern Europe; the case of the left-wing Podemos party in Spain, which tactfully distanced itself from Syriza’s negotiating tactics and its No campaign, was the most indicative example of Syriza’s “splendid” isolation. In that respect, the UK leave camp is reminiscent of Syriza’s lack of allies in Europe, except for the European far right parties, which marvel at the prospect of a Brexit, as this would bring disruption to the European project. All European governments, mainstream political parties and the EU institutions are against the Brexit camp.

Thirdly, both referenda developed a “fear versus hope” rhetoric. In both cases, the pro-EU camp followed a cost-benefit campaign backed by international institutions’, think tanks’ and economists’ reports, whereas the anti-EU camp opted for an emotional campaign of democracy and national sovereignty and the pursuit of a vague “utopian dream”.

The pro-EU camp in Greece, under the slogan “We stay in Europe” adopted a rational, expert-based approach on the basis of what it saw as the devastating effects of Grexit on the Greek economy. Syriza, for its part, vowed that a No vote would strengthen Greece’s negotiating position vis a vis its creditors, that a possibility of a Grexit would frighten the markets, leading what it called a “European crusade against austerity”; it is interesting how such promises resonated with Greeks despite being pronounced during the most dramatic economic week in Greece’s post-second world war history, when the country was defaulting on its IMF payment and the government was imposing capital controls to avoid a bank run and to offset pressure from the ECB.

In Britain, the UK remain camp enjoys the backing of all possible domestic and international institutes and think tanks, and the reports from the most prominent international organisations alert us to the substantial cost of Brexit to the UK economy. The leave camp, on the other hand, has adopted the approach of promises for more jobs, more money for the National Health Service, more favourable trade agreements, the regaining of national sovereignty, the control of the migratory flows to the UK and better quality democracy, if the UK chooses to leave the EU. There is an ironic parallel in the methodology of emotion and national dignity employed by both the left-wing SYRIZA in Greece and the right wing leave camp in Britain.

Lessons learned

What can Greece, a peripheral country of the European South and the most vulnerable economy in the eurozone, teach a strong and economically confident Britain? In terms of the referendum experience there are three important lessons to take on board:

- First, referenda are not a panacea to internal party discord; on the contrary, they magnify differences and can lead to irreconcilable divisions. In Greece, the referendum led to the split of Syriza, between the anti-European hardliners and the pro-European softliners. The hardliners created their own party – the Radical Left – which fought in the subsequent elections in September, two months after the referendum, and became the most vocal political enemies of their former comrades.

In the UK, taking into account the rifts among politicians of the conservative government, most notably Cameron and Osborne on the one side, Johnson and Gove on the other, it is hard to see how these two different camps will co-exist politically after the referendum. It is expected that the outcome of the referendum will determine the future of the present government. In the case of a No win, it is difficult to see how Cameron will go on as Prime Minister, having to negotiate agreements that he does not believe in. One can even foresee that a leave win could bring political turmoil or early elections, when the government will have to pass the exit bill through the Parliament. In the case of a Yes win, Cameron would need to move swiftly to restore some kind of unity in his party.

- Second, the EU is worried by the precedents that exits or threats of exits may create, and for that reason it chooses to be tough in its negotiations with potential or prospective “exiters”. The experience of Greece is daunting in that respect, when despite a resounding No to the austerity agreement by the Greek electorate, the post-referendum deal was harder than before.

As a result, the EU sent a clear message to other potential dissidents in Spain, Portugal, Italy or Cyprus, not to follow the Greek example of demanding concessions on state spending or debt relief. So what does this tell us about Britain? It is probable that in the case of a leave win, the EU will want to avoid creating a British precedent with other EU-reluctant countries in central and eastern Europe and will want to be hard during the exit negotiations, including the much-anticipated-by-the-leave-camp trade agreements.

- Last lesson, but not least, is that those who do the populist talk and promise “the utopian dream” by raising the bar of popular expectations can have a very hard landing when they are called upon to deliver on their promises. This is the toughest lesson from the Greek experience which led to major disappointments in Greece and raised significantly the financial cost of adjustment.

In the British case, the leave camp has chosen to blame the EU for all the domestic problems of the country and has been promising “a national paradise” if British people vote to leave the EU. With this in mind, one important message from the No camp in Greece to the leave camp in the UK is “be careful what you wish for”!

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