Whether it’s “radical left” or “center left,” Greece’s new ruling party is pivoting away from the European Union and toward Russia.
The Syriza Party is sticking its thumb in the eye of the “Troika” – the European Union, European Central Bank and the International Monetary Fund.
In doing so, debt-ridden Greece is setting up an unprecedented challenge to the EU’s German bankers, as well as the IMF. Rejecting lenders’ demands that Greece privatize its energy company and railroads, Syriza says it will move forward with a populist anti-austerity program that includes providing free electricity and food stamps to the poor.
Casting their lot with Russia – which provides almost all of Greece’s natural gas – Syriza leaders protested the West’s threat of more sanctions against Moscow. Athens’ pivot to the East could provide more political heft for BRICS – the Brazil-Russia-India-China-South Africa economic alliance that has emerged as a counterweight to Western financiers.
Greek Foreign Minister Nikos Kotzias, a political science professor and former Communist, delivered a sharp rebuke to the EU establishment this week.
“Anyone who thinks that in the name of the debt, Greece will resign its sovereignty and its active counsel in European politics is mistaken. We want to be Greeks, patriots, Europeanists, internationalists,” he declared.
Lyndon LaRouche, a former Democratic Party candidate for president, called the Greek election a “profound victory that can secure a shift in the entire European and trans-Atlantic situation.”
He noted that the Greeks’ rejection of the Troika’s austerity demands was one of several recent developments that undermine the EU. He cited the recent decision by the Swiss National Bank to decouple the Swiss franc from the euro, which triggered huge derivatives losses by Wall Street and the City of London.
“(German) Chancellor Angela Merkel and company are in a tough situation, pretending to control things in Europe, but in reality, they have no control, and the Greek vote proves it. They will be shaken hard, and will not be able to pretend that the austerity policies are working.”
Since Spain, Portugal, Italy and Ireland are also suffering under the yoke of austerity policies, calls are rising for a European-wide debt conference to write off a major portion of the state debt.
A similar restructuring goes back to a historic precedent that’s of particular significance for Germany, says economic analyst Jeffrey Steinberg.
“As part of the post-war recovery and reconstruction of Europe, in 1952 and 1953 there were extensive discussions/negotiations to write off a major portion of the German debt. And this resulted in the 1953 London Debt Conference,” he noted.
“In that conference, 50 percent of all of the German debt, some of it going back all the way to the Versailles agreements at the end of World War I, were simply written off, and the remainder of the German debt was stretched out over the next 30 years at low interest payments, with the added provision that the German debt would not be payable if the funds were to come out of actual money invested in the reconstruction of Germany,” Steinberg said.
Could past be prologue?