Greece’s Prime Minister is vowing to press ahead with a controversial bailout referendum as European leaders rule out any fresh debt offer before Sunday’s vote. The World Today spoke to John Keane, a professor of politics at the University of Sydney, who says there’s a power struggle underway.
KIM LANDERS: Greek Prime Minister is vowing to press ahead with a controversial bailout referendum as European leaders rule out any fresh debt offer before Sunday’s vote.
One day after Greece became the first developed economy to default on a loan with the International Monetary Fund, Germany’s chancellor Angela Merkel says the world is watching.
Earlier I spoke to John Keane, a professor of politics at the University of Sydney.
He says there’s a power struggle underway, and Europe is fast becoming a “madhouse”.
JOHN KEANE: There are many things at stake.
Above all, I think what’s developing is a power struggle.
It’s not about debt or about the conditions of repayment, but there is a power struggle going on about austerity.
The question which hangs over the whole of the Eurozone and the whole of the European Union is whether enforced austerity through governments works, whether it’s the right path or not.
What we now see is a face off in preparation for Sunday’s referendum, where Brussels would like to break the back of the Greek government, so it’s a pretty brute power struggle in a bigger drama.
If Greece were to be pushed out of Europe, out of the Eurozone and then out of the European Union, then this would no doubt fuel for British withdrawal, and it would also fuel support for all of the populism, the right wing populism that’s bubbling all over Europe.
So the consequences are very dramatic and long term.
KIM LANDERS: Would this also mean that nations like Italy and Spain might withdraw from the Eurozone as well?
JOHN KEANE: I think there is a disintegration of the European Union going on and it’s accelerating as we speak.
It’s important to understand why it is that there are growing numbers of Europeans who feel that austerity doesn’t work, economically it doesn’t stimulate growth, it does the opposite, and that it has socially unjust consequences.
The most extreme remark along these lines interestingly was made about two weeks ago by Amartya Sen, the Nobel economist, who in England during a visit, likened austerity to giving the Greeks a mixture of antibiotics and rat poison.
You know, antibiotics to try to clear up the system, improve the collection of taxes and make more transparent government in Greece, but issuing rat poison in the package because the social consequences of austerity in Greece are extreme – 50 per cent of pensioners are now living beneath the poverty line, the official poverty line, and the European, Brussels, the European Commission are insisting that there be a further cut in pensions.
So there is growing anger in various parts of the union, and this is the face off that I think Greece is at the centre of.
KIM LANDERS: You’ve recently been travelling through Europe, how would you describe the mood there?
JOHN KEANE: It’s a miserable mood, I think there is widespread pessimism, I think there’s a lot of fatalism.
It is not just this dispute that is developing about austerity, but there are other matters, like the Ukraine, there is an uncivil war going on in the Ukraine and almost nothing is done.
There is fear of the rise of Putin throughout the European Union, there is the growth of all of this populism that is a protest against the established party systems, there are moves to withdraw – of course the British referendum coming up in 2017 is the one to watch.
When you put all of this together, Europe feels a bit like a madhouse.
I mean there’s pandemonium developing, and it’s very hard from this distance to feel it, but when you’re on the ground it’s very striking.
I have seen nothing like this in my lifetime in the European Union, where I lived for more than 30 years.
KIM LANDERS: John Keane, a Professor of politics at the University of Sydney and director of the Sydney Democracy Network.
Originally published on ABC The World Today