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Anastasia Balezdrova

A day before the arrival of creditor representatives and the resumption of negotiations, Greece is shocked by the disclosures of the Plan B prepared by former Minister of Finance Yanis Varoufakis. Two claims have been raised against him, at the prosecutor’s office of the Supreme Court at that.

Despite Varoufakis’ claims that he acted on the orders of the Prime Minister, Alexis Tsipras remains silent. So far, it is unclear whether he will respond to the request on this issue that a group of New Democracy MPs have submitted to parliament.

At the same time the completion time of the negotiations on the third rescue programme is running out and the government is showing no signs that it is ready to meet the strict requirements of creditors.

The political situation in Greece was the topic of the conversation that GRReporter held with professor in strategic management and organizational sciences at the universities in Cyprus and Warwick Haridimos Tsoukas.

Mr. Tsoukas, the confession of Yanis Varoufakis to what he said at the Official Monetary and Financial Institutions Forum has provoked reactions among the media and citizens in recent days but not from the justice. Do you think there are grounds for starting criminal proceedings against him?

I am not a lawyer but when you take the personal data and in particular, the tax numbers of citizens to use them in a way that is not provided for by the law, logic tells me that criminal liability probably occurs. I admit that I am not the most competent person who can express an opinion on the legal aspects of the case.

Beyond them, however, the issue is not only legal but also political. Mr. Varoufakis actually wanted to escalate his conflict with the creditors in a way that would have certainly take Greece out of the euro zone. This was a collision scenario. I would call it 'national party-politics' against creditors. In addition, the collision transferred inside the country, after it became clear that he had no confidence in the Secretary for Revenue, which he called an 'agent' of the supervisory Troika, to put it mildly. Such a situation certainly leads to excesses, Greece’s exit from the euro being the excess in this case.

Varoufakis himself allegedly drew up a plan B on the orders of the Prime Minister.

Yes, and I think that he is probably telling the truth. Most likely, Mr. Tsipras had told him to draw up such a plan. Generally, the existence of alternative plans is not bad, quite the contrary, there must be such. However, the difference is that when a minister starts working on them and sees what their consequences will be, he should be frightened by them and he should give up.

Varoufakis’ plan was implemented by the day of the referendum. The subsequent retreat happened too late. To put it in other words, the euro zone provided no opportunity for Greece to oppose it and to win in this conflict. Therefore, the only outcome of all plans B and the like is exiting the euro zone.

However, Greek voters did not have this choice as an option. Both Varoufakis and Tsipras assured that their actions aimed at keeping Greece in the euro zone. Nevertheless, in parallel, and in a secret way, they were working on a solution that would have eventually taken the country out of the common European currency. And that raises the question of democratic legitimacy.

This questions the real purpose of the government, although its official position was "negotiations in the euro and an agreement with creditors." What is the political responsibility of the Prime Minister?

The fact is that, in his speech in parliament, Mr. Tsipras admitted that Grexit would be disastrous for the country. He said the same when he urged MPs to support him with their votes before he surrendered to creditors, but it was too late. Greece was already out of the bailout programme and banks were closed. He should have recognized this immediately after he was elected Prime Minister in order for the country to avoid experiencing this amazing adventure. It was irresponsible of him to recognize this at the end of the road, having left ruins behind him.

I would like to state something else. I think it is not possible to discuss a currency change in a democracy, in a secret manner with regard to the public. Currency is very fragile. The early reports of this made people feel very insecure and they rushed to withdraw their money from banks that then closed. Varoufakis acted in a secret manner for this reason. However, precisely this method shows the limits to which a democratic government can act in such a clandestine and confrontational manner.

On the other hand this problem does not exist in a dictatorship. And to be able to achieve its goal, the government had to resort to increasingly authoritarian measures.

In this situation and in view of the results of all opinion polls that the majority of Greeks want Greece to stay in the euro zone, do you think that the early elections about which the government is talking could lead to a solution?

I think we are going from one impasse to another. Greece is in a state of political impasse. The Prime Minister has lost his political capital because he has preferred the strategy of confrontation with creditors that has not only failed, but also faced him with a colossal loss. In a mature democracy, such a Prime Minister should resign.

I cannot imagine such a thing happening in the UK for example and the particular Prime Minister still occupying this post. Greece, however, is not a mature democracy and we cannot expect mature behaviour from our politicians.

Under these conditions, I think that the best solution would be to form a government of national unity that would involve all parties and Alexis Tsipras as Prime Minister. With all his shortcomings, he is still able to communicate with those Greeks who gave a negative vote in the referendum. However, I fear that it helps him overcome the internal problems in SYRIZA.

In addition, my observations show that probably he is not seeking that solution and he will announce elections. And they make sense if Tsipras reoriented that part of SYRIZA, which would remain with him and changed his policy orientation to pro-European as well as his coalition partner. If this happened, we could talk about a new course. However, you understand that, for this to happen, Saul must become Paul on the path to Damascus. In my opinion, it is very difficult for this to happen. It is not impossible but very difficult.

Why five years after signing the first memorandum of financial aid does Greece continue to be in this situation?

I think the reasons for this are two. The first is that a very heavy memorandum was imposed on Greece that should have included restructuring of its sovereign debt in 2010. Creditors did not do it because it would have affected their own interests.

On the one hand, all targets in the memorandum were refuted and on the other, Greece is a country in a state of constant instability. The rhetoric against the memorandum was particularly acute and it was enough for all governments to believe that the political price of implementing it would be too high.

It activated the Greek political culture that is introvert, xenophobic, highly polarized and confrontational. Therefore, neither of the governments that had to implement the memorandum was able to do so.

If we could plan things on a white sheet of paper, the ideal scenario would contain sovereign debt restructuring in 2010 and a government of national unity during the period of implementing the memorandum until Greece emerged from the crisis, and its political life and the country itself became stable.

These things did not happen for the reasons I stated previously. And now we are paying the price.

Why were reforms in Cyprus successful unlike in Greece?

The political culture of Cyprus has something very important that Greek lacks. And it is the survival instinct. Every day a Greek Cypriot leaves his house, he sees the Turkish flag on Mount Pentadaktylos. It reminds him that his country is under occupation and he knows that the enemy is as close as some tens of metres. This creates a national rallying, despite the political differences between the parties.

Dimitris Christofias has signed the memorandum and Nicos Anastasiades has implemented it. I.e. the two major parties have supported it. The smaller parties have responded but occasionally. They have not taken concrete actions. There are no strikes. We can say that the political culture there is largely culture of consent and administration of rules.

The Troika wants exactly this: to comply with what you have signed, so that you can get out of the agreement within the specified term. The actions of Cyprus in this direction seem to have been successful.

I think Greeks alone have made life more difficult, precisely because of the poor culture of confrontation that reigns here. On the one hand, this culture does not want to change all the things that have led us to bankruptcy, namely corruption, vicious ties, putting the party interest over the public, etc, and on the other, it aims to perpetuate polarization and confrontation. It is something like a 'political DNA' that is inherent to Greek culture and that can hardly be changed.

How do you see the emergence of Greece from the crisis?

It is difficult to answer. As a citizen, I would like it to happen but as an analyst my concerns are that Greece will fail to emerge from the crisis and that perhaps the drachma is its fate.

Greece has to fulfil many prerequisites to be able to function in such a tight and disciplined system like the euro zone. These prerequisites are not available in Greek political culture and I do not see how they could occur.

Therefore, my forecast is that Greece will probably continue to be in a state of crisis because of which it will return to the drachma. Of course, what I am saying from the position of an analyst is what I do not want to happen as a citizen and I will do whatever I can to prevent it.