The creation of a new Greek myth

‘Let’s meet at a place called Florus in Exarchia Square’, Stavros, my Socialist Party contact in Athens, told me over the phone. ‘I’m grey-haired, I’ll be wearing a leather jacket and reading a newspaper.’ Great, that narrowed it down to about 80 per cent of the male Greek population.

I met up with Stavros on the afternoon of Greece’s 24-hour public service strike on 10 February, an impressive protest against the Papandreou government’s austerity measures, which have been dictated by the European Union (EU) and international banks. Greece is being forced to cut its deficit from 12.7 per cent to below three per cent in just two years. The all-out strike left public offices, airports and non-emergency hospital services shut down.

Exarchia Square, in the centre of Athens’ university district, seemed pleasantly boho, surrounded by cool cafés and bookshops. Yet when I returned to my hotel after meeting with Stavros, and read Times photographer Paul Rogers’ blog of his Athens assignment, I got the impression that I had unknowingly risked my life by having coffee there.

‘We head to Exarchia Square’, Rogers noted, ‘a particularly edgy neighbourhood teeming with anarchist groups. I’m told that the police rarely respond to emergency calls there for fear of being drawn into a carefully planned ambush in the hope of a riot.’ The intrepid reporter observed that the square was teeming with dangerous-looking twentysomething males, before retreating to a coffee shop.

Gosh, what bollocks. The place is indeed full of scruffy young men, but they are likely to be arts students with a copy of Žižek’s latest tome in their pockets. Exarchia Square is to Athens what Upper Street, Islington, is to London. Rogers’ photos are great, but his dramatic account fits into a narrative of the recent financial crisis in Greece that has been adopted by everyone from the Greek prime minister George Papandreou to Western reporters.

The story, beguiling to jaded, post-political Western Europeans, is a sort of Zorba myth: that Greece is the wild man of the Eurozone, full of militant unionists, revolting farmers and youthful anarchists. A place where homemade bombs are hidden in the foyers of every merchant bank, and where an unreconstructed Leninist Communist party can get thousands out on the streets at the drop of a flat cap.

The Communists and other radical left groups do have significant power in parliament and they really can get boots on the street. By 9am of the 24-hour strike, flag-waving workers and students were pouring into Syntagma Square in central Athens. Radical songs blared from loudspeakers, and huge banners ringed the square.

Yet Stavros was not overly impressed. ‘That was nothing. They should have been able to fill Syntagma several times over.’

Stavros works for PASOK, Papandreou’s Socialist Party, which currently dominates Greek politics with 160 seats. The centre-right New Democrats, who lost power in 2009 after calling the election two years early, hold 90 seats. But Stavros is on the left of the party, and he is sympathetic to those who will lose out from Papandreou’s austerity package. But despite the strike, Stavros doesn’t believe that there is much public sympathy for them.

‘Papandreou is no Tony Blair or Kevin Rudd. But he has a fair amount of support’, Stavros tells me. ‘The KKE [the Communist Party] says that this is an expanding centre of anti-capitalist action in southern Europe, but they lost seats to PASOK in the last election and I think they’ll lose more. People feel something has to be done. Even the farmers’ blockade [the annual road blockade by farmers campaigning for more EU stabilisation funds] was down this year.’

This feeling that ‘something that has to be done’ has been persistent since Papandreou took power in November 2009. It took root after the New Democrats simply threw up their hands at the prospect of reforming the country’s economic system.

Greece’s entry into the Eurozone in 2001 and its continued conduct – running a deficit way above the three per cent maximum set by the European Central Bank, and cooking the books to conceal its true magnitude – has been a product of collusion between the country and the EU from the start, a way of maximising the reach of the Euro to bolster its sense of historical inevitability. The EU, specifically the Eurostat agency, has done this with other countries, too, but they appear to have been caught out by the width of the gap between Greece’s real and reported position.

Greece overspent on the 2004 Olympics, and was affected strongly by the credit squeeze following the 2008 financial crunch. The recent revelations that the country used Goldman Sachs and several other banks to conceal debt using complex currency swaps has further embarrassed both Greece and the EU.

With a deficit running at between 10 per cent and 16 per cent of GDP (no one knows for sure), the country’s interest payments have been accumulating to an unserviceable level. The possibility of defaulting on debt repayments began to be talked about in late 2009, as a knock-on effect from the financial crunch that hit Dubai. Throughout December, Papandreou talked down the prospect of crisis, saying that Greece would shoulder its burden and get by. By January, he had changed tack, and was talking up the prospect of default. Financial analysts would say this was due to the further havoc wreaked by the markets on Greek bond rates in the interim. Others aren’t so sure.

‘Papandreou had to solve a problem within PASOK, then he had a problem within Greece. So he’s gone to Europe’, Apostolos, a Greek sociologist and educationalist tells me. He is a supporter, albeit a reluctant one, of Papandreou’s proposals for economic reform, which chiefly involve a freeze on public service salaries, pensions and conditions, and an attempt to bring more of the country’s black market – currently about 30 per cent of the economy – into the light in order to tax it.

But Apostolos believes the drive is as much political as economic. ‘I’m not saying things aren’t bad but the main problem for Papandreou was how to get his own party behind the change. So if the proposals are coming from Europe, it makes it easier. For the Greeks Europe has been good. There’s been a million new jobs created since the 1990s. So if it the directives come from Europe….’

This speculation raises the possibility that Papandreou has cannily used the external perception of Greece as a wild and unpredictable place that could throw a spanner in the European wheel. Cheekily, his speech to the World Economic Forum at Davos in late January used the Communist argument that Greece was a ‘weak link’ in the chain of EU-era capitalism, playing on its image as a riot-torn nation.

Crucial to that image was the series of demonstrations and riots that convulsed the country in late 2008, following the fatal shooting by police of the 15-year-old Alexandros Grigoropoulos. Protests and occupations lasted for days, and at that time Exarchia Square genuinely was a no-go zone for police. For a short while, it looked like the events might spill out into something more. Then, nothing happened.

‘A lot of people have spent time thinking about why nothing came out of the protests’, says Apostolos. Given the youth of the protesters was it little more than an armed tantrum? ‘No it was more than that’, says Apostolos, ‘but…there was something of that about it, too’.

Seeing as there has been no repeat of the December 2008 events, and that no systematic processes of change came out of it, it appears that this was less a continuation of Greece’s militant tradition than a temporary explosion, resulting from the collision between that radical tradition and the new EU-focused, post-political administration.

Looking around the arcade where Apostolos and I are having coffee, it’s an easier scenario to believe. Slick, mall-like, filled with grey-haired, leather-jacketed men reading newspapers, it is at one with the city’s new post-Olympic core. Over the past decade the centre of Athens has been transformed into something resembling a generic European city, with the same chain stores and gleaming up-market fast food joints as anywhere across the continent. Large areas of the city remain distinct and lively, but they are also decayed: the EU stabilisation funds that were meant to assist urban regeneration never hit ground zero. Instead, it was mostly swallowed up by inertia and bureaucracy.

That the new consumer lifestyle has come, for some anyway, courtesy of the Euro, has left the Communist party with a difficult line to sell, as it effectively identifies the EU, the Euro and NATO as part of a system of Western elite dominance. There is much truth to this analysis, but that does not hide the fact that Athens now has a Marks & Spencer.

Shaped by a major purge in the 1980s that expelled the entire Euro-Communist faction – who went on to form the party Synapsismos, which holds (as part of a left coalition) 14 seats in parliament – the Leninist nationalist Communists appeal to many of those who have lost out in the Europeanisation of Greece, as well as to a contingent of militant, retro-chic youngsters. As a result, and in common with nations such as France, the KKE’s main competitor for votes is the hard-right, anti-immigrant Orthodox Party.

‘The communists’, says Apostolos, ‘they’re nowhere, out of reality’. A Synaspismos supporter, he nevertheless believes that this party faces a problem. ‘They were the first left party for Europe, but Papandreou has effectively taken their policies and changed PASOK with them. But the bureaucratic Europe we’re in is not the one any of us want. But now, what can they say?’

Indeed, and that gives a clue to the other dimension of the Greek ‘crisis’; an opportunity for the EU to establish a process whereby its bureaucratic and administrative power can be extended deep into the national state. For the elaborate dance that has been going around on around the Greek situation in Paris and Brussels has of course only one outcome. Some arrangement – probably a loan repayment guarantee by Germany and France as sovereign nations, overseen by the EU – will be extended to Greece, in return for which it will allow a greater degree of intervention than has occurred before in the history of the EU, putting the country into de facto administration.

The ‘weak link’ theory, then, becomes organised not around the chain of the Euro, but around the chain of residual national sovereignty, and Greece becomes a model whereby other problematic economies – Portugal, Spain, Ireland, Italy – can be similarly dealt with. Far from being a ‘lose-lose’ situation for the EU, as it first seemed, the Greek crisis offers an opportunity to strengthen the Euro-elite’s claims that national sovereignty must be subordinated, in order to shield it from the damage of short-term speculation. How that goes will depend on how attentive the EU is to deep-seated feelings of national pride and independence, and the reaction will also tell us something about how such feelings stack up in relation to the lifestyle opportunities offered by submitting to the EU process.

It was perhaps inevitable that the complex intersection of underdevelopment and modernity in Greece would attract a few political carpetbaggers, but the degree to which the cause has attracted instant experts, and a sort of Saxon supremacy, is pretty stunning. Athens is in fact the safest capital city in Western Europe, with a higher degree of functioning, public political life than in the atomised West. Two thirds of Greeks support some level of reform to the public sector along the broad outlines of Papandreou’s plan. And all the scalding from the West is pretty rich, given that the Greek government had willing partners in the impeccably northern, protestant wonks of Eurostat.

The Zorba take – that Greeks are a bunch of gesticulating taxi drivers incapable of contemplating structural weaknesses – feeds into the simplistic eurosceptic idea that people are incapable of consciously choosing the less worse option. In a country with a decades-long debate over what its role should be in Europe, few are unaware that the EU’s separation of currency and governance is a surrender of power. But the drachma was a permanently unstable currency, and Euro entry opened a development process that would not have occurred otherwise.

That does not mean that the country will necessarily accept the future cuts. Nor does it suggest that the split between Southern Europe – the so-called PIGS (Portugal, Spain, Italy, Greece) countries – and the North will be easily closed. This split was one thing the Euro was meant to overcome – in order to stabilise Europe as a bloc in relation to the US and the East. Yet its main effect has been to create consumer-led booms and bubbles in some areas – property in Spain, anyone? – while the compensating stability funds have entrenched backward agricultural systems. Given Greece’s awareness that its appalling financial management could not go on (one reason why the New Democrats were kicked out so decisively), it may be somewhere like Spain that becomes the place where dissatisfaction takes a more concerted form. With 20 per cent unemployment, the country has seen far fewer benefits from the Euro than Greece.

Papandreou has now abandoned the ‘crazy Greece’ rhetoric and has turned his guns on the EU in the wake of its recent failure to announce an explicit rescue plan for Greece. The ‘weak link’ argument may return in the coming months. Possibly, the degree to which Greece’s economic and political development has been sandwiched into a tight time frame means that different modes of politics that elsewhere have been separated by decades are here occurring simultaneously. It may well be that another eruption like the one of December 2008 is on the horizon, but one, as Constantine Tsoulakas, the country’s leading political theorist told the Guardian, that may be equally lacking in form:

‘Until recently there was no nihilistic or anarchist mass movement in Greece. Now we have a wide movement of disappointed young people who do not see the need to restrict their reactions towards things they consider untenable.’

But for the moment, though, it’s all quiet on Exarchia square. Whether Papandreou’s agile manoeuvring can maintain his public support remains to be seen. EU finance ministers have now nailed down the conditions Greece must observe – a steady four per cent annual reduction in its deficit until 2012, with the sanction of further measures being imposed at the same time as Greece loses its vote on the committee.

For the moment, the state of play in Greece is being put to contradictory ends inside and outside the country, communicated to Greeks by the elite as a measure of consensus, and to Europe as a measure of the country’s threat to the entire EU project. Despite that, in the Western media and beyond, the Zorba dance is set to continue.

Guy Rundle is an Arena (Australia) Publications Editor. He is the author of Down to the Crossroads: On the Trail of the 2008 Presidential Election. (Buy this book from Amazon (UK).)