What Europe’s Greek Tragedy Means for Latin America
In Greece’s legislative elections on January 25, the Coalition of the Radical Left (Syriza) conquered almost half of the unicameral Hellenic Parliament, winning 149 seats out of 300. The party’s leader, self-proclaimed populist Alexis Tsipras, was swiftly sworn in as prime minister. This unprecedented victory indicates a dangerous trend not just for Europe, but also for our apparently distant American continent.
The countries on Europe’s southern periphery — Portugal, Spain, Italy, and Greece — have faced economic and social turmoil since the 2008 financial crisis, and it’s precisely in these nations where neo-Marxist political movements have gained strength. Despite their program being based on little more than demagoguery and wishful-thinking, they stand a real chance of consolidating power. Moreover, several of these groups have received funds from ideologically sympathetic nations such as Venezuela and Russia.
In Spain, the meteoric rise of the Podemos party, headed by university professors Pablo Iglesias and Juan Carlos Monedero, bears all the hallmarks of revived Marxism. Its populist slogans that focus on the marginalized masses — who believe the country is at an economic dead end — have proved extremely successful. According to the latest polls, Podemos, like Syriza, will win a majority of Spain’s legislative seats in late 2015, its illogical and manipulative discourse on human misery notwithstanding.
But then again, Podemos’s denunciation of the elite, and claims to be above “parasitic” politics, are backfiring. Several scandals have emerged linking these new-age politicians to corruption schemes, misappropriation of public funds, undue benefits at state universities, and cronyism.
The most outrageous is the origin of the so-called donations, with which both Podemos and Syriza afford lavish campaigns: Venezuela’s Chavista government. The South American pseudo-revolution has created a state so “prosperous” that it can now export the socialist model to other countries, the farther away the better.
Grim sarcasm aside, we need to assess what impact Europe’s pseudo-revolutionaries will have on Latin America. Tsipras’s first promises as prime minister followed his incoherent populism: raising the minimum wage, re-hiring the state employees fired during the austerity period, hiking public spending to pre-2008 levels, bailing out Greek banks, and forcing private financial institutions to freeze debts, among other lunacies.
His most important promise is perhaps his refusal to repay the debts to EU countries that have kept Greece afloat for the last seven years. Germany and Italy, the main creditors, have already threatened to expel Greece from the Eurozone and the European Union if Tspiras follows through.
But the difficulty is that there’s no legal mechanism to throw a nation out of the European Union. Greece’s imminent fall could drag the whole union with her, one of Latin America’s main trade partners. The European bureaucratic mammoth will have to be saved by businessmen, as it has happened before, through tax hikes on the wealthy and other harsh economic measures. This will reduce their capacity to invest abroad, cutting a flow of capital that Latin America desperately needs. A crisis in Europe will mean less demand for Latin-American exports — both in manufactured goods and in primary commodities exported to Asia for manufacturing but later destined for Europe.
German solidarity, a sort of economic anchor for the rest of the European Union, has dried up. Her citizens have realized that EU leaders who live on Maduro’s and Putin’s largesse are planning on financing their populist adventures with German productivity and taxes. But fairy tales eventually come to an end, and goodwill can only go so far.
While Europeans must deal with their problems on their own, we Latin Americans must come up with alternatives to reduce or eliminate the nefarious consequences of populist measures. Maybe the silver lining is that the old continent will finally come to understand how close and real the danger of Chavismo is, and that it turns out to be far more sinister than the romantic projects they have supported in Venezuela, Ecuador, Bolivia, Argentina, and Nicaragua.
Translated by Daniel Duarte. Edited by Laurie Blair and Fergus Hodgson.