TFF Associates & Themes Blog

By Johan Galtung

At the time of starting writing this editorial the referendum is on, so is the TV. Those two Greek words are all over. But the outcome is unknown; it will be known at the time of finishing the editorial.

However, could the most important aspect of the referendum be the referendum itself, not the outcome? The idea of asking people, the very demos in a democracy, even at the risk of losing, resigning?

The most aggressive creditor against Greece, Germany, did not dare to do that over the Euro entry. They decided for a people they knew were against, hiding behind Hitler’s use of a referendum as demagogy.

Any OXI-NAI outcome means a new departure. With no party below, say, 1/3, serious attention has to be paid to both sides’ narratives.

Let us be clinical about that bad EU-Greece relation.

There is a deep culture: another Christianity, with “optimism in the longer run”, another alphabet. They relate across deep gaps.

There is a deep structure: the division of the Roman Empire along those cultural lines more than 1600 years ago. Moreover, whereas the Western part had a millennium of “dark Middle Ages” the Eastern part with Greece had a millennium of continuation from Constantinople; and almost five hundred years more, till 1830, after it became Istanbul. Greece has been deeply embedded in the Orthodox-Islamic East.

There is a recent history to make Greece West: the Anglo-American war 1944-45 against communists who had fought Nazism, General Markos, Russia/Soviet oriented; and then the 1967 military, fascist, coup. Strategically important in East Mediterranean against Russia, Islam.

There is a very recent history of bad Greece-EU relations: the 2002 Gr-entry based on national accounts faked by Goldman-Sachs–the European Central Bank president has a past with them – and Greece using the EU as a resource by milking agricultural funds for non-existing farms. Greece is by no means an innocent victim; there may also be revenge in it.

There is class politics in it. Syriza is at the left in the sense of speaking for the poor, young, unemployed, retired, for those suffering most from the austerities. The EU members and institutions are ruled by center-right governments and institutions speaking for the banks (in which they have money-investments), and for themselves.

There is fear of a left wing domino effect. New parties appear challenging austerities and democracy as party-ocracy; party programs with little participation, only votes, as opposed to Podemos with much participation but little program–and votes. With 134 regional seats and hundreds more in municipalities, the program is now taking shape: transparency, debt relief, progressive taxation, direct democracy.

All of this and more. The stakes are historical: the worst case for OXI is continued austerities destroying the economy it should save; the best case is more bailout, softer terms and some debt forgiveness. The worst case for NAI is Grexit, the best case closer to status quo.

The worst case for EU is not Grexit but Greek Orthodox ties to Russia and Ottoman ties to Turkey, let alone the Chinese ties, already strong in Piraeus as trade entry to Europe. Cheap oil could flow from Russia via Turkey. And how about some million well endowed Chinese tourists on coming Silk railroads, Silk lanes reviving possible Chinese links to East Mediterranean? At the very least Silk flights.

Membership in NATO might survive all that, but turn empty, vacuous.

Is this also a best case for OXI and worst for NAI? Not so clear, the public debate has not come to that point. The option is in the hands of all Greeks given their history: fight for independence, but never squeezed economically as by an EU; based on solidarity.

That opens for clever Greek policy beyond inspiration by Argentine and Iceland: good relations to all, EU, Russia, China. Get Russian-Turkish gas, Chinese tourists and at the same time negotiate a better deal with the EU. Neither NAI submission nor OXI revolt.

They are greatly helped by the split of the Troika with the IMF de facto opting out: “We failed to realize the damage austerity would do to Greece” (The Guardian, INYT, 3 Jul 2015). The EU may have wanted to punish them for the past and for leftism; and if they are capable of a mistake like a single–not a common–currency without unified fiscal policy, they may also be capable of this one.

Nevertheless, the IMF now tries to get their house in order. They both need to read their Tony Atkinson Inequality: What Can Be Done, with very concrete proposals bringing better distribution into the core of economic theory and practice; more concrete than Thomas Piketty in Capital.

Grexit with drachma is likely, not for surface economic reasons but for deep cultural-structural reasons.

Before Greece – and during the Cold War–DDR-Poland-Hungary-CzechoSlovakia-parts of Ukraine and Romania – the Baltics had ended up at the wrong side and revolted; the death blow to USSR-WTO coming from the tiny Baltics. Deep culture-structure were stronger than surface politics, then as now. Being 2% of the EU economy the effect should be manageable, and the long term effect might be beneficial in bringing EU and EURASIA closer together.

There might be a domino effect with parties in other countries also wanting to get out, and a race between them and the EU trying to make the EURO-pean Union more solid.

As pointed out by Paul Krugman (INYT 4/5 Jul 2015) much of the EU–not only the Southern fringe but also the North, Finland-Denmark-Netherlands are in trouble with declining GNP/capita because of the single currency straitjacket: no currency to devalue, nor a unified system of bank guarantees. Germany, the power house, survives well–as long as the debtors feed the creditor.

Help from China? Offered but rejected, so far. Then, the vote.

OXI – No! made it, as expected, with 61%; opening for all the above–with a little bit of good sense and good will, on all sides.

A great day for Democracy, for Greece, for Europe, for the world.

First published at Transcend Media Service here.