It’s been just over two weeks now since document SN 4070/15 was published on the European Union (EU) website. It’s the statement that was issued at the end of the latest all-night-and-much-of-the-following-morning Euro Summit on 13th July: you know, the one in which a complete breakdown in negotiations was only averted by EU Council President Tusk telling the participants at one point that “there is no way you are leaving this room”, allegedly. As documents go, SN 4070/15 is extraordinarily one-sided, and even more so than the creditors’ previous offer of a few weeks earlier, which both the Greek government and its people (by referendum) rejected as being too tough. “That’ll learn ‘em”, as it’s sometimes said in colloquial English.
As I’ve previously written, Document SN 4070/15 looks to be Greece’s last chance to maintain any semblance of near-term stability in its economic and financial system, more or less (‘Greece’s last chance. No, really’, The Top Note, 23rd July 2015). Other governments may not have the direct power to force Greece’s hand with respect to Euro membership, but the European Central Bank (ECB) probably does. Actually, it was a power that was always implicit in the original Maastricht Treaty, by dint of the ECB’s money-market operations only being available (according to the original rules) to countries with an investment-grade sovereign credit rating (and which Greece, alone among the current Euro members, doesn’t). Not only that, but the final ruling on the legality of the ECB’s Outright Monetary Transactions programme, which was handed down just a few weeks ago by the European Court of Justice, was even more unequivocal than the court’s earlier opinion (from January): evidently, anything that the ECB does to safeguard the Euro is within its mandate.
Back in 2002, under United Nations (UN) Resolution 1441, Iraq’s Saddam Hussein was given a similar “final opportunity” to come clean about his government’s activities. Trust between his government and ‘the Institutions’ was also at rock-bottom following years of perceived misbehaviour and unfulfilled agreements, and it was fairly plain that ‘regime change’ was the aim of at least some of the Western governments with whom Saddam Hussein was dealing (there were no Twitter hashtags like #RegimeChange or #ThisIsACoup back in those days). In the case of Iraq, it was the US making the running for war, with Germany and France in opposition, whereas in Greece it is Germany apparently making the running, with US and France in opposition. But whereas Saddam Hussein had been in power for twenty-three years, Alexis Tsipras had only been Prime Minister of Greece for twenty-three weeks.
UN Resolution 1441 was the document in which agreed Iraq agreed to come clean – finally and completely – about its Weapons of Mass Destruction programmes and its various key architects and components, and to submit – completely and unconditionally – to an intrusive new inspection regime by ‘the Institutions’ (which in Iraq’s case meant Mr. Blix’s UN Weapons Inspectors and Mr. El-Baradei’s International Atomic Energy Authority).
Unlike UN Resolution 1441, which Iraq was actually forced to ‘agree’ with according to one of its terms, Greece would either abide by SN 4070/15 – and therefore maintain its eligibility for a potential future ESM programme – or it wouldn’t. But after a few good early days – late-night parliamentary debates and favourable votes on new reform bills etc. – the process already shows signs of wear-and-tear, with new bickering over the precise access that troika officials will be granted in Athens, and some of the tougher reforms already being rescheduled.
In the case of Iraq, of course, Resolution 1441 did not do the trick of keeping the peace for long because, a little over four months later, a US-led military alliance invaded the country. Reading UN Resolution 1441 now, thirteen years on, it’s hard to see how Iraq could ever have complied with all its terms. Then again, some people believe that was the point: that it was an agreement waiting to be broken in one form or another, which would then provide a pretext for military action. And that begs another imponderable question with respect to the second Iraq War, which concerns when the decision to invade was actually taken. Some people believe it was taken as early as 9/11 itself.
The parallels with Greece, and SN 4070/15, are significant in at least a couple of respects. For example, and as a number of people have already noted, SN 4070/15 looks very much like an agreement that has been designed to be broken by Greece at some point. Why did Eurozone policy-makers allow this to happen? The short answer is: because they could. As for whether a decision has already been taken in certain quarters to push Greece out of the Euro – inasmuch as such a decision is possible – nobody knows for sure, nor will they ever in all likelihood.
In other words, the early signs suggest that SN 4070/15 in Europe has about as little chance of maintaining a workable and sustainable ‘peace’ with respect to Greece as UN Resolution 1441 did with respect to Iraq.
One final thing, as well. In the aftermath of UN Resolution 1441, policy-makers realised that public opinion was far from ready for a War in Iraq, and so the PR machine of the day went into overdrive in an attempt to make the case for war. Likewise with respect to SN 4070/15, global financial markets might be ‘ready’ for Grexit, but public opinion doesn’t look like it is ready, neither outside Greece nor within it. The trouble is, the last time the PR machine went into over-drive, all kinds of wild claims and ‘dodgy dossiers’ ended up being produced, most of which have been significantly dis-credited subsequent to events, and most of which actually made matters worse. Thirteen years later, and now very firmly in the Internet Age, one question is whether the public will be quite so gullible this time around?