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Syriza’s win in Greece won’t ruin EU but will create problems for Germany

January 27, 2015, 18:21 UTC+3 Alexandrova Lyudmila

MOSCOW, January 24. /TASS/. The resounding victory of Greece’s left-wing bloc Syriza, led by Aleksis Cipras, in last weekend’s parliamentary elections is unlikely to cause a collapse of the eurozone, but it will surely prove German Chancellor Angela Merkel’s great headache, as the South European countries’ anger over Berlin’s policies has been mounting for quite a while, polled Russian experts have told TASS. Also, analysts doubt the events in Greece may shatter the basics of the European Union.

The leaders of Syriza and of the right-wing nationalist party Independent Greeks have come to terms over creating a ruling coalition. Before the elections Cipras proposed a radical alternative to the policy of dependence on western loans, which the international troika - the European Union, the European Central Bank and the International Monetary Fund - had devised for Greece.

"It is they, and not us, who are ruining Europe," Cipras told Russia’s Ogonyok magazine. "I am referring to those who have imposed an anti-democratic and anti-economic model on Europe. Whatever the EU’s 28 member-countries may be discussing, it is the notorious trio that makes decisions in the interests of banks, and not economic development."

In his opinion the European Union "used the crisis in the interests of neo-liberal capitalism by launching an unprecedented attack against the working-class people."

"The root cause of the crisis is still there. Moreover, it has been masked still better. The trick played on Greece will go down in history and economics manuals as an example of what is not to be done."

"Of the billions that the European lenders agreed to give Greece a tiny two percent stayed in the real economy, while 98% was spent to repay debts, in other words, to save the banks," he said.

According to Jubilee Debt Campaign, 34 billion dollars was used to finance 2012 debt rescheduling, and another 48 billion spent on the recapitalization of Greek financial institutions. The lion’s share - 149.2 billion - was funnelled into paying interest on loans. Assistance to the Greek economy and the people stood at a tiny 16 billion euros, or less than 10% of the overall amount, which is pretty close to the Syriza bloc leader’s own estimates. Since 2012 the country’s foreign debt has been up from 133% of the GDP to 174%.

Jubilee Debt Campaign has arrived at the conclusion that the rescue plan for Greece was nothing else but a lifeline to financial institutions and a means to convert the private sector’s debt into public debt.

One should not expect, though, that Syriza’s victory will bring about radical changes in the European Union, says Nadezhda Arbatova, the chief of the European political studies at the world economy and international relations institute IMEMO under the Russian Academy of Sciences. Before the elections, Arbatova told TASS, many politicians often come out with populist slogans, but as soon as they rise to power, they have to take a realistic look at the current state of affairs and to compromise.

"Those euro-skeptics who believe that Syriza’s victory is tantamount to Greece’s walkout of the euro area are absolutely wrong. When he was in Moscow last May, Aleksis Cipras said that Greece was a European country following a multi-vectored policy. He did not mention the possibility of leaving the EU."

Arbatova believes that first and foremost he would try to have loan terms revised.

"He will hardly succeed in his attempts to have the debts written off altogether, but a compromise is quite possible. Loan repayment terms may be extended up to the 2040’s," she said.

By and large, Greece is not alone in its attitude to Berlin’s policies. The crisis that engulfed the euro area a while ago has brought into being new configurations inside the EU. "Traditionally there was the Berlin-Paris axis. Now we are witnesses to the emergence of a Roman-Latin one - of France, Italy and Spain and the adjoining Greece. All these countries disagree with Merkel’s policies."

Berlin, Arbatova believes, is annoying many countries, and not just by the proposed means of handling economic problems, but by its policy of dictating.

As for Greece’s relations with Russia, Arbatova believes that considering them in either/or terms would be fundamentally wrong. "Greece may remain a member of the European Union and at the same time have a very good relationship with Russia. If the situation in Ukraine gets better, Greece, and also Italy and France will come out for the lifting of sanctions."

Greece will certainly not quit the EU, but as far as the euro area is concerned, the further march of events is anyone’s guess, the head of the world politics chair at the Higher School of Economics, Maksim Bratersky, told TASS.

"One thing is pretty clear: the European Union is not strong enough yet. The EU will survive, of course, although this shock will be a rather strong one. It will have to change a lot in order to exist from the situation in a decent fashion," he concluded.

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