From Otto the Great to the European Troika, how Subjected to German Power is Greece?
For the better part of the last decade, Greece has been gasping for air, as it painfully reconstructs its economy, while contending with German and European demands. Indeed, Germany owns the title of champion for economic rigor, both in the homeland and in the European Union which it virtually commands, as a leading economic power. How much do the Germans get to decide, when it comes to Greek affairs?
Centuries of influence, soft or hard
The German reach into Greek business is nothing new. At the end of the 10th century, the Saxon king, Otto the Great, finished his father’s work and unified all Saxon duchies under his command. Bolstered by his own success, he continued to expand his reign beyond Saxony and quickly brought neighbouring countries under his rule. Hungarians, known then as Magyars, perceived the threat which this power-hungry king represented, and formed a line of defence against it, but were quickly defeated. From then on, little stood in the way of the Holy Roman Empire’s rapid expansion, and in a matter of years, Otto the Great would rule over much of Europe, all the way to Greece, despite the Greeks having their own self-standing civilization.
Strangely, little has changed in the millennium since. Greece has been part of the European Union since 1981. Quickly after its integration, Germany showed signs of discontent as to how Greece was being run and placed increasingly stern demands on national operations, namely fiscal dispositions. Indeed, Germany has the strongest economy in the European Union and is renowned for its rigidity in the management of public and fiscal affairs. As such, it became the de facto administrator of the European Union and repeatedly attempted to correct the way member-states were being run.
Today, many consider that Germany sees Greece as nothing more than a useful pawn on the European chessboard, or even a sacrificial lamb. Yanis Varoufakis, Greece’s former finance minister, writes: “My conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.” The 2008 crisis, which was triggered by the United States subprime crisis, caused the contraction of credit that Greece crucially relied on to complete its transformation and the modernization of its administration. The economic effects on Greece were devastating and Germany’s control over Greece skyrocketed to unprecedented levels.
The crisis of 2008
Greece unknowingly shook hands with the devil, when it contracted large loans from the European Union (largely funded by Germany) to modernize its administration to the standards of Brussels. These standards being particularly stringent and complex, many programs were delayed and overrun, stretching Greek reforms in time. During this period, Greece largely relied on international credit to operate. This lifeline quickly dried up, in the wake of the Lehman Brothers collapse and ensuing American economic meltdown, and Greece – alongside other unfortunate European partners – found itself left out to dry. Germany seized the opportunity to launch powerful attacks on Athens and negotiated that any economic assistance be placed under the condition that Athens would accept being effectively placed under European – or German – administration. German Finance Minister, Wolfgang Schäuble, said that “Greece has to realise that when you break rules over a long period of time, you have to pay a high price.”
The risks of being run by Germany
German influence places Greece in a very delicate diplomatic situation. Germany holds the largest Turkish diaspora in Europe, and this immigrant population in Germany is organized and influential, at the national level. Greece, on the other hand, suffers from a rocky relationship with its eastern neighbour. Greek-Turkish relations are rife with incidents, ranging from territory claims to fishing rights, and from immigration tensions to actual gunfights. In a nutshell, Turkey is a threat, albeit not an acute one, to Greece, and having its pseudo-administrator influenced by Turkey cannot be good for Greece.
Additionally, Greece has already suffered greatly from German-induced measures and the brutal austerity measures demanded by Berlin during the bailout. These reforms, as drastic as they may have been, were dubious in efficiency. If they did correct Greek governmental malfunctions to some extent, they left a long-lasting scar on Greece’s collective identity, and there is much doubt as to whether the benefits outweighed the damage. Since stepping back would amount, for Berlin, to recognizing its diplomatic strategy was poor, it is likely that Germany will keep pushing ever further in the same direction and increase the pressure on the Greeks. Politico analyst Matthew Karnitschnig writes: “Berlin, which has long opposed outright debt relief, refuses to budge. With a general election in Germany set for late September, [Angela] Merkel and Schäuble are unlikely to soften their position anytime soon. The Greek bailouts remain politically toxic in Germany, and any agreement involving debt forgiveness would be seen domestically as an admission the rescue effort had failed — and at the German taxpayers’ expense.” In other words, it is politically impossible for Berlin to loosen its grip on Athens.
The last risk is simply civilizational or even geographic. Germany is keen to expand its control over Greece and be ever more at the command post whenever national decisions are being made. Even if questions of justice or equity among European partners were pushed aside, it must be taken into account that Northern European mindsets differ from Southern European ones. What applies and is obvious to a German may be totally irrelevant to the Greeks and their modus operandi. By letting Germany expand its reach into its borders, Greece runs the high risk of being dominated by a European leader which does not understand its ancient and specific culture. From that point on, anything goes…