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What Mr Tsipras learned about bargaining power in the EU

Shortly after SYRIZA’s electoral victory last January, I wrote on this blog that SYRIZA’s positions showed that they did not understand European Union (EU) politics. They were proposing changes to Greece’s bailout programme, which they did not have the bargaining power to negotiate successfully.

Shortly before the Euro Summit on Greece (the summit of the Heads of State or Government of Eurozone member-states), Greek Prime Minister Alexis Tsirpas conceded that his government had ‘made mistakes’ during the five-month long negotiations with Greece’s creditors. Indeed, the seemingly never-ending negotiations and especially the Greek government’s decision to abandon them in order to hold a referendum caused a dramatic deterioration of the situation in Greece.

As the Greek economy has reached the point, where men in their 70s are sitting on the pavement outside closed banks crying because they cannot access their money, one might have thought that  Mr Tsipras would have realised the implications of his government’s ‘mistakes’. Greece’s need for an agreement became desperate. As all students of EU politics know, when one is in such desperate need of an agreement, one will have to make whatever concessions are required of them in order to get it.

In the same breath, however, Mr Tsipras claimed that his government was negotiating ‘as an equal among equals’ and that it was restoring ‘the lost political parity between Greece and the other Eurozone countries’. The 17-hour long Euro Summit must have come as a rude awakening. The agreement to which Mr Tsipras consented requires more of Greece than its creditors’ previous offer, which the Greek people rejected in the referendum. It has been referred to as ‘the most intrusive economic supervision programme ever mounted in the EU’. Surely, this is not the outcome of bargaining among ‘equals’.

As I explained shortly before the Euro Summit, an agreement was unlikely. The evolution of the negotiations confirms that the Euro Summit almost failed to reach an agreement. Around 6 in the morning, both Mr Tsipras and German Chancellor Angela Merkel had reportedly realised that no agreement was possible and they were on their way out of the room, when European Council President Donald Tusk stopped them.

An agreement that would not require Greece to comply with stricter conditions than those rejected by the Greek people, would have been possible only if Greece’s creditors had concluded that the irreversibility of Eurozone integration should be preserved at any cost. Mrs Merkel made it clear that this was not the case when she said that there was not going to be any agreement ‘at any cost’. Given the German – among others – government’s position, only an agreement that would require the Greek government to make more concessions than its people had authorised it to make was possible. Mr Tsipras made those concessions.

 

It is now unclear whether the Greek government will manage to ensure the ratification of the agreement by the Greek parliament. It is also unclear whether the Greek government will survive. The leader of Independent Greeks (SYRIZA’s junior coalition partner) Panos Kammenos referred to the negotiations as a ‘coup’ that led to an agreement to which his party could not consent. SYRIZA MP and cabinet member Panayotis Lafazanis has openly asked Mr Tsipras to withdraw his consent to the agreement. It may cost him the fall of his government, but Mr Tsipras has learned that the more desperate for an agreement one is, the more concessions one has to make in order to get it and therefore the less bargaining power one has.

Kyriakos Moumoutzis is a Lecturer in European and International Politics at King’s College London.



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