The Grexit Report

An overview of the public currency debate in Greece

Introduction

Six years have passed since the agreement of the first bailout programme for Greece. 2010 was also the first year during which the notion of Grexit emerged in the mainstream public discourse both in Greece and abroad, mostly through media reporting and Press headlines. From the very beginning, the Greek crisis was perpetually coupled with Grexit and this is perhaps the most striking aspect of the public discussion with regard to the single currency. Ever since the country came under European supervision of its public finances (similar – but more constrictive – to that of 1897), the idea of Greece withdrawing from the eurozone has been generally perceived as an alleged negative result of the unsuccessful administration policies or the potential impasse of the negotiation with the country’s creditors.

Within this context, the reference to Grexit has been repeatedly used by mainstream, mostly conservative political forces and figures as a deterrent to justify their choice of policy, tactically and strategically. In short, Grexit looms as a disastrous threat almost every time the review of the Greek programme by the EC/IMF/ECB appears to come to a deadlock.

At the same time, the unchallenged participation to the eurozone (and the EU) has been firmly associated with the typically proclaimed European course of the Greek nation, as established and maintained by the ruling powers since the so-called polity change in 1974 (Metapolitefsi), following the fall of the military dictatorship.

The year 2017 finds the euro (currency) debate in Greece hardly evolved, with Grexit remaining a polarising, highly politicised, ill-fated term used in the orations of political figures and media reporting fueled by them. Thoughtful approaches and elaborate proposals, with or without scientific substantiation, have been brought forward by some members of the academia, economists and/or current and former statesmen. Nevertheless, such views remain sparse and at the sidelines of the debate.

The parties

From the parties that received at least a five digit number of votes in the September 2015 elections in Greece[1], to single out the establishment parties which are unequivocally pro-euro is a simple task. These include the conservative New Democracy party (Nea Dimokratia), the centrist, once dominant Panhellenic Socialist Movement (PASOK), the centre-right The River (To Potami) and the Union of Centrists (Enosi Kentroon).

Admittedly, in more than one case, the position of the Greek Left has been neither uniform nor clear.

  • Coalition of the Radical Left (SYRIZA)

Despite the widespread presumption that SYRIZA overthrew ND posing a eurosceptic agenda, Prime Minister Alexis Tsipras has consistently argued in favour of the country’s participation in the eurozone and the EU. Even when it became known (in July 2015 and July 2016) that former Minister of Finance Yanis Varoufakis had been asked to devise a “Plan B” (or “Plan X”), Mr Tsipras reiterated this was solely an emergency option in case of a forced Grexit[2]. On the eve of the 2nd congress of SYRIZA, the party’s central committee contended its support “to efforts of democratisation of the EU and the eurozone”[3], while the political decision of the congress defended the government’s compromise with the EU/IMF/ECB (August 2015) as a step “to avert the disaster with which the creditors threatened our country through default and exit from the eurozone”[4].

Aside from numerous other indications or attestations of the party’s positions on the topic of currency, it is reasonable to count SYRIZA, without doubt, in the pro-euro parties. The same applies for the conservative and co-ruling party of Independent Greeks (ANEL).

  • Communist Party of Greece (KKE)

The programme of the Communist Party of Greece has been long deemed steadfast and unchanged, i.e. against the eurozone and the EU. However, party officials and senior members have systematically desisted from the currency question as such. As the central committee of the KKE has argued, “seemingly radical slogans and demands (such as the ones for direct democracy, exit from the Eurozone, etc.)” are “utilized for the entrapment of the people in various versions of bourgeois politics”[5]. The committee gave a more palpable account of this view while referring to anti-euro parties, on the eve of the September 2015 elections: “They confess that they want a national currency as a tool for capitalist development, while the keys of the economy continue to belong to the monopolies… The KKE is the only force that can support the struggle of the people against poverty, unemployment and a degraded life whether inside or outside the Eurozone, with the euro or with a national currency”[6].

The KKE’s approach, recapped by its general secretary D. Koutsoumpas, in an effort to differentiate from other left parties, is that “the main issue is not the currency”[7], but the control of power and the means of production. Such formulations have drawn criticism against the party for not explicitly opposing the euro.

  • Popular Unity (Laiki Enotita – LAE)

Ever since the founding of LAE (August 2015), after the split from SYRIZA, its leadership has openly supported the solution of a national currency and monetary independence. In its programmatic announcement in September 2015, the party asserted that an exit from the eurozone “is well-timed, in terms of political realism” and must be coupled with “a rejection of the neoliberal policies and choices of the EU”[8].

In February 2017, the party leader Panagiotis Lafazanis, along with members of its political secretariat, presented LAE’s proposal of the transition to a national currency. Among others, the proposal argues that “the national currency is not an end in itself, neither a fetish”, but “a tool, starting point, challenge and opportunity” to end “the enslavement by the memorandum, the eurozone supervision and an unsustainable debt”[9].

  • Anticapitalist Left Cooperation for the Overthrow (Antikapitalistiki Aristeri Synergasia gia tin Anatropi – ANTARSYA)

The coalition of ANTARSYA includes several factions and organisations, combining socialist, eco-socialist, anti-fascist, revolutionary and communist views. Despite the divisions it faced during the last few years, it remains the main party representing the so-called extra-parliamentary Left. According to its Central Conference, the coalition sets as a crucial political objective the “withdrawal from the eurozone, break/unbinding from the EU, from the viewpoint of internationalism and to a course that will fulfill the needs of workers and the people”[10].

  • United People’s Front (Eniaio Pallaiko Metopo – EPAM)

EPAM was founded in 2011 by the economist Dimitris Kazakis as a political front addressing people of all ideologies, from communists and leftists to conservatives. It is generally considered a party with a leftist agenda, promulgating five principles: debt write-off, national currency, revocation of the bailout/loan agreements, justice against political wrongdoing, formulation of a new Constitution through a democratic national assembly[11].

EPAM was the first political organisation to distinctly link the transition to a national currency with the unilateral cancellation of Greece’s public debt, using the provisions of international law[12].  It rejects compromising options such as the parallel currency or withdrawal from the eurozone but not the EU.

  • Course of Freedom (Plefsi Eleftherias)

Founded by former parliament Speaker, Zoe Constantopoulou, in April 2016, Course of Freedom has not received the chance to take part in an election. The party does not make explicit reference to the currency issue in its founding declaration. However, during her speech at the Plan B conference in Rome (11 March 2017), Ms Constantopoulou openly lambasted the euro and the lack of monetary sovereignty the eurosystem entails[13]. She has explained that for Course of Freedom the currency is a tool for political and economic emancipation, production and consumption, but highlighted that “to argue that the drachma or any currency stands as panacea is ultimate fallacy. I don’t believe in any currency as a solution for all problems” or “as a guarantee of what we fight for, i.e. democracy and freedom”[14].

The media

The role of the media has been central in driving the public debate on the Grexit hypothesis and currency affairs in general. The vast majority of newspapers, radio stations and broadcasting networks assumed an anti-Grexit stance from the early years of the Greek crisis. As scholars have noted, “these media emerged as ardent supporters of the country’s affiliation to the ‘Euro’, projecting it obsessively as the ‘one way path’ or as a taboo issue. So, they supported or combated parties on the basis of their ‘pro- or contra-Euro’ stance”[15].

In this context, the sector has exhibited distinct patterns in the way it covered, presented and directed the currency debate:

  • Firstly, the Greek media – with the exception of certain news websites and blogs – assumed the position of the mainstream political parties that an exit from the eurozone would be catastrophic for the economy and society. In parallel, “as far a default is concerned, the Greek media could be considered as a vehicle spreading fear among public opinion”[16]. Within this perpetual interpretative framing, reporting has been often based on the presumption that Grexit has been always a possible disaster as a result of the government’s failure to apply dictated reforms and/or a threat posed by the country’s creditors, instead of being a potential policy option.
  • Secondly, during the last five years, political figures and economists in favour of a national currency were hardly invited to relevant talk shows or live news discussions, while their views were treated with absolute scepticism or were labeled as populist. The term “lobby of the drachma” (today evolved to “gang of the drachma”) has been notoriously used by pro-euro officials and even journalists to describe those who support different views.
  • Thirdly, prominent newscasters and commentators have repeatedly contained the currency discussion in an elementary, unscientific and trivial thinking framework. Questions with regard to how Greece would be able to cover its needs in fuel, medicine and food imports after an exit have been excessively reproduced. Impulsive or sketchy exaggerations have been expressed, such as the possibility of sanctions against Greece, loss of alliances and diplomatic isolation that would render it vulnerable against hostile neighbours. Equally, a post-exit Greece has been being associated with or represented through stereotypical images of a bankrupt Argentina, a hyperinflated Venezuela or/and a deprived North Korea. From the very beginning of the crisis, “most of the press subscribed to misconceptions”, including the effects of an exit from the eurozone, and “anyone who argued against a particular misconception was likely to face a number of questions that were partly based on other misconceptions”[17].
  • Finally, news outlets have refrained from reporting on currency debates in other eurozone countries. Coverage of institutional studies, research papers, Press pieces and political motions with regard to the common currency has been limited, including of notable relevant publications, such as Joseph Stiglitz’s book, “The Euro and Its Threat to the Future of Europe”. Instead, reporting focused mostly on communications by financial institutions warning about the consequences of Grexit or on politicised developments, such as the – ominous for the mainstream parties – electoral dynamics of eurosceptic M5S in Italy.

Unfortunately, media bias in Greece concerning the possibility of a currency change has been inasmuch intense as international media bias has been about the Greek crisis in general[18]. No matter the version of the Grexit in question (coerced choice, unilateral withdrawal, coupled with EU exit etc.), it has been associated with isolation, devaluation, regression and chaos. Fear-mongering and pro-euro obsession in news reporting and dominant journalism have actually encumbered the unfolding of an in-depth, round currency debate in Greece.

Public opinion

Since the first bailout programme was implemented in Greece, public opinion towards the EU and its institutions has deteriorated, but most Greeks remained in favour of the common currency nonetheless, as reflected in almost every single opinion poll or survey.

It should be noted that domestic polling agencies have repeatedly failed to grasp the political and social trends in Greece when it comes to the most recent electoral races, including the 2015 referendum. Due to their controversial reliability and them being often considered intertwined with mainstream political interests, it is a safer option to look upon polls of a wider, European or international scope:

  •  A Pew Global Attitudes poll in 2014 for example indicated that 69% of Greeks would rather keep the euro and 26% would prefer to return to the drachma, in spite of the fact 73% thought their economy has been weakened by the economic integration of Europe[19]. At the same time, 65% of them had an unfavourable opinion of the EU[20]. The latter figure rose to 71% in 2016, when a striking 92% of Greeks also said they disapprove the way the EU deals with economic issues[21].
  • At the end of 2014, a WIN/Gallup International survey found an even higher portion of Greeks against the euro. 52% would prefer to have a national currency, against 32% that would prefer the euro. Still, only 34% would vote for an exit from the EU in a referendum[22]. The same survey found 44% of Greeks in favour of a national currency and 43% in favour of the euro, in the end of year 2015[23].
  • A Gallup survey (not related to Gallup International) in 2015 showed a majority of Greek adults (55%) thought the euro has harmed their country. Fewer (35%) would see membership in the EU harmful as well[24].
  • Last but not least, the known Eurobarometer interviews conducted by EU Commission staff suggest that 54% of Greeks (11% lower than in 2015) “think the euro is a good thing” for their country” and 32% (up from 26%) “a bad thing”[25]. Moreover, 78% tend not to trust the EU, 47% have a “total negative image” of it and 30% would stand against “a monetary union with one single currency”[26].

It is clear that trends reflected in the results of opinion polls reveal ambivalent feelings towards both the EU and the euro in Greek society. This volatility of opinions may well signify that people’s responses are driven by concurrent sentiment in public life, political rhetoric and economic developments, rather than by a settled, well-considered point of view. In any case, the percentages of population that would prefer a Grexit are by no means low, although the average person – Greek or any other European – may lack the complex knowledge of the possible Grexit “version” they would envisage (unilateral exit, a Lexit version, a withdrawal in consensus etc.).

There are at least two key factors that influence the public opinion:

  1. The first and more direct is the imbalanced media coverage, which has instigated fear and misgivings in society towards leaving the eurozone, as shown above.
  2. The second and more subtle, but perhaps more powerful as well, is the inherent mentality of many Greeks to hold on to the Western identity of modern Greece. There is the widespread belief that participation in the EU contributed to the country’s growth and modernisation, as a subsequent continuation of Greece’s association with Western Europe since the 1960s and after the fall of the military dictatorship, in 1974. Therefore people are inclined to see any deviation from the established pro-European orientation as uncharted political territory. This could also explain why several polls show many Greeks detest the EU but fewer would risk to opt out of the eurozone, let alone the Union and its Communities en bloc.

Concluding remarks

Taking into account everything that has occurred since the first austerity package was imposed in Greece, it becomes all the more evident that the public discussion on the currency affair has been a far cry from a fruitful, democratic, unprejudiced debate. There is no real dialogue in Greece when it comes to the currency question whatsoever, not least due to the efforts of dominant political centres to prevent it from fully unravelling. The pro-euro views receive the lion’s share of media publicity, while opponents of the euro are given neither enough Press space nor broadcast time to properly express their arguments. Likewise, the institutional dialogue, i.e. involvement of universities, governmental bodies, parliamentary committees, independent state authorities, is limited as well.

In other eurozone countries the situation begs to differ. In Finland for example, the scenario of Fixit (exit of Finland from the euro) has not only been raised by – liberal, not leftist – politicians, but has been the topic of collective work of scholars and experts, aiming at “evaluating the future of the euro and Finland’s future as a euro member”[27]. In the Netherlands, long before the anti-EU party/ies gained momentum, it was revealed that the Dutch Ministry of Finance had a contingency plan to exit the euro, called “Florijn”[28] since 2012. Apparently, such studies or blueprints of a possible exit strategy are part of state providence, in a manner similar to military defence preparation. Still, to devise safeguards, work through technicalities and anticipate shortcomings would constitute a vital part of a proper debate, because of the perplexed nature of an elaborate discussion on monetary issues.

“Money is not a tool but evolves as a code of conduct to structure social relationships”[29]; relationships that cannot be lucidly described in a few newspaper rows or a few minutes of television air. The conundrum of how would or should Greece withdraw from the eurozone can be challenging enough for economic analysts, let alone for the average audience. There are complexities of economic, political and legal essence to be resolved, beyond common questions such as “how can Greece make imports when it leaves the eurozone”. For example, the issue of withdrawal from the EU will immediately emerge, along with the problem of debt cancellation, since the reversal of austerity measures would collide with the conditionality programme signed with the European Stability Mechanism (which holds approximately 70% of Greece’s public debt[30]), and which now is part of EU law[31].

There have been indeed notable initiatives and analyses to address as many questions as possible with respect to a Grexit by economists, political dignitaries and members of the academia, from C. Lapavitsas[32] and G. Tolios[33] to D. Kazakis[34] and Th. Katsanevas[35]. Nevertheless, as argued in this report, their voice remains at the fringe of the public debate.

In sight of major political and economic developments in the EU, the official communication of a multi-tier Europe and given the more or less continuous fiscal consolidation in the eurozone periphery – especially in Greece – the question of Grexit is not expected to fade any time soon. Even if Greece does not pose as a new centre of political instability until the elections of 2019, the life and reality of the people is unlikely to change. Therefore, the currency debate is expected to become more intense and more imperative, along with a transnational discussion on the future of the euro, which in turn will effectively attest the diminishing of the once celebrated irreversibility[36] of the monetary union.


[1] Ministry of Interior election results database, http://ekloges.ypes.gr/current/v/public/index.html?lang=en

[2] M. Khan, “Alexis Tsipras: I ordered Varoufakis to ‘defend Greece’”,  The Telegraph, 31 July 2015, http://www.telegraph.co.uk/finance/economics/11776767/Alexis-Tsipras-I-ordered-Varoufakis-to-defend-Greece.html

[3] Positions of the CC of SYRIZA for the 2nd congress – June 2016 (in Greek), p. 47, http://www.syriza.gr/upload/66155_1.pdf

[4] Political decision of the 2nd SYRIZA congress – October 2016 (in Greek), par. 3, http://www.syriza.gr/pdfs/apof2synedr.pdf

[5] Theses of the CC of the KKE for the 20th congress – December 2016, p. 54 http://inter.kke.gr/export/sites/inter/.content/download/ESES_En.pdf

[7] “Epta” newscast (online video), ERT1, 18 February 2017, http://webtv.ert.gr/katigories/enimerosi/18fev2017-epta/

[8] Programmatic Announcement of Laiki Enotita, 2 September 2015 (in Greek), http://laiki-enotita.gr/?p=1581

[9] The proposal of LAE for the transition to a national currency, 7 February 2017 (in Greek), http://laiki-enotita.gr/?p=7637

[10] Political proposition of ANTARSYA, 27 February 2017 (in Greek), http://antarsya.gr/node/4147

[11] Five steps towards a sovereign, independent and truly democratic Greece (in Greek), http://epamhellas.gr/metavasi/

[13] Plan B – 11 Marzo 2017 – Sessione Plenaria [online video], https://www.youtube.com/watch?v=IW1xfHIhpg4&feature=youtu.be&t=2525

[14] Zoe Constantopoulou, interviewed by C. Efimeros on ThePressProject, 18 January 2017, [online video in Greek] https://www.youtube.com/watch?v=9aBNoyD1abc

[15] Kaitazi-Whitlock, S. “Greece, The Eurozone Crisis and the Media: The Solution is the Problem”, Journal of the European Institute for Communication and Culture, vol. 21, issue 4, 2014, p 17.

[16] Tzogopoulos, G. The Greek Crisis in the Media: Stereotyping in the International Press, New York, Routledge, 2016, p. 146.

[17] Skarpedas S. “Seven Myths about the Greek Debt Crisis”, University of California, October 2011, p. 20.

[18] Ibid. p. 133.

[19] “A Fragile Rebound for EU Image on Eve of EP Elections”, Pew Research Center, May 12 2014, p. 41, 45.

[20] Ibid. p. 49.

[21] “Europeans Face the World Divided”, Pew Research Center, June 13 2016, p.36, 46.

[22] “End of year 2014 – Global”, WIN/Gallup International, Table 4 and 2. http://www.orb-international.com/perch/resources/global-we-tables-weight1-v6.pdf

[24] “Majority of Greeks Say Adopting Euro Has Harmed Country”, September 7 2015, http://www.gallup.com/poll/185216/majority-greeks-say-adopting-euro-harmed-country.aspx

[25] Flash Eurobarometer 446 – Greece fact sheet, October 2016.

[26] Standard Eurobarometer 86 – Greece fact sheet, Autumn 2016.

[27] Kanniainen, V. (ed.), The Future of the Euro – The options for Finland”, Helsinki, Libera, 2014.

[28] The Government had a Dutch currency plan (in Dutch), Argos TV – Media Logic, 18 Nov. 2014, https://www.human.nl/medialogica/regering-had-scenario-voor-nederlandse-munt.html

[29] Nelson, A. Your money of your life: money and socialist transformation”, Capitalism Nature Socialism Journal, vol. 27, no. 4, 2016.

[30] Hellenic Republic Public Debt Bulletin, no. 84, December 2016, p. 2, http://www.pdma.gr/attachments/article/37/Bulletin%20No_84.pdf

[31] See Treaty establishing the ESM, Art. 13, par. 3 (“The MoU shall be fully consistent with the measures of economic policy coordination provided for in the TFEU, in particular with any act of European Union law, including any opinion, warning, recommendation or decision addressed to the ESM Member concerned”).

[32] See: Flassbeck H. and Lapavitsas C., Against the Troika: Crisis and Austerity in the Eurozone, Verso, London, 2015.

[33] See: Tolios G., The transition to ‘national currency’ (in Greek) [I metavasi sto ‘ethniko nomisma’], Taxideftis, 2016.

[34] See: Kazakis D., The Greek Pompeii (in Greek), Pontiki, 2011 and Kazakis D., Overthrow is one-way (In Greek) [“Monodromos i anatropi”], To Honi, 2013.

[35] See: Katsanevas, Th., The transition to drachma (in Greek) [I metavasi sti drachmi], Photo Unica, 2014.

[36] “EMU: an irreversible process”, by the President of the EU Commission Jacques Santer, 28 November 1997.

The report was originally created for the Lexit Network (March 2017)

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