Greek Prime Minister Alexis Tsipras is in Moscow today to discuss gas prices, trade and investment with Vladimir Putin; Finance Minister Yanis Varoufakis recently left Washington, where he assured the IMF’s Christine Lagarde that Greece will make a loan repayment due tomorrow and discussed with her the Syriza government’s proposed reforms. A symmetrical shuttling, you could say, beyond the EU’s borders; a reasonable hedging of bets at a critical moment for Greece; an assertion of agency. But reading the Anglophone press, you might think the Greek government was about to default on its IMF loan, print drachmas, call snap elections, thumb its nose at Europe, and sell its soul to Putin for a fistful of roubles.
A fog of disinformation surrounds Greece’s ongoing negotiations with its creditors to unblock 7.2 billion euros of loan funds, without which the government is likely to run out of money in weeks (or months—this too is unclear). An April 5 piece in Financial Times, based almost entirely on blind quotes from “senior official[s]” and eurozone finance ministers, suggested that an agreement will only be possible if Syriza ditches its elected left-wing MPs and forms a coalition with two center-left parties, the discredited Pasok and newly created Potami. In The Daily Telegraph three days earlier, Euroskeptic journalist Ambrose Evans-Pritchard cited unnamed sources “close to the ruling Syriza party” to claim that Greece was about to nationalize the banking system and introduce a parallel currency. This fog is swallowed and recycled by Greece’s private TV channels, bought hacks and politicians. The effect is to spread confusion and mistrust, threatening the already tremulous negotiations, the Syriza government and what’s left of European cohesion.
Of the reform proposal Syriza has submitted to the Eurogroup, a twenty-six-page document leaked by Financial Times, there’s barely any discussion. But the text bears reading. The longest section, on taxation, spells out how the government plans to increase its revenues and end tax evasion; though the figures may be optimistic, it’s a serious start. The chapter on labor market reforms quietly makes the economic case against austerity and argues that growth requires fair wages and protection of workers’ rights. Acknowledging that undeclared work has long been a problem in Greece, it points out that it’s “risen alarmingly” in the last four years: you can’t collect taxes from people who can’t make ends meet. The deregulation of collective bargaining—which effectively cancels collective wage agreements by letting employers opt out of them—has further depressed the economy. So has the reduction of the minimum wage: “The unprecedented reduction in labour income had decisive (multiplier-accelerator) knock-on effects on aggregate demand and growth.” No pay, no taxes, no spending, no growth: it’s hardly a radical argument. Christine Lagarde herself admitted two years ago that the program in Greece had failed. And yet labor market reform is one of the major sticking points in the Greek government’s negotiation with the lenders, along with further pension cuts and the privatization of state assets, which according to the Greek government has so far brought in only 2.6 billion euros, though the EU and IMF predict an income of 22.3 billion by 2020.