25 May 2012

Tsipras on euro crisis: ‘Both sides have nuclear option’

In an exclusive interview with Jonathan Rugman, Syriza party leader Alexis Tsipras – who could be the next Greek premier – says logic will prevail and Greece will not be forced out of the euro.

Do you think the eurozone will continue to insist on Greek austerity?

We don’t believe that they will instate the austerity measures because now they can understand that the problem is not a Greek problem. It’s a European problem. And if Greece goes outside Europe, the eurozone and euro, the second day, the next day, the markets will try and find who will be the next. And the next is Italy, with 1.9tr in euros debt – not like Greece. We have only 350bn.

So you’re confident?

Sure. We believe that they will not instate in their positions. I don’t know if they’re bluffing or if they try to do their best to cut our forces in Greece because we have elections in Greece, and they want New Democracy and Pasok to be in the government and not us. But I believe that at the end of the day they will decide by thinking what is better for all of us – not only for Greece but for all Europe.

What if the Germans are not bluffing? What if they say: “Enough is enough. You either stay in the euro, with austerity, or you leave”? Are you prepared to take Greece out of the euro?

I don’t believe that they will insist on this position. We have to discuss for a real solution for the Greek problem because, at the end of the day, it’s not a Greek problem. It’s a European problem.

So it’s win-win to find a solution without austerity, without internal devaluation – but, of course, with some structural reforms that we need to do. But, of course, with a real solidarity. Of course, we need a Marshall Plan, not only for Greece but also for all the countries of southern Europe.

So, for example, cutting the minimum wage by 22 per cent, which is supposed to happen next – would you go ahead with that if you were prime minister?

I think that it’s impossible to happen…

Cutting pensions? Would you be prepared to do that?

..even if the government is New Democracy and Pasok. It’s impossible.

Angela Merkel said Greece should uphold its commitments. If you become prime minister, if you form a government, will you uphold the commitments Greece has made?

It depends which commitments you are talking about. We have some commitments resulting from our participation in the eurozone and the European Union. We are obliged to keep the basic commitments which come from the treaty and the terms of our admission in the EU. It is not one of the founding principles either of EU or eurozone to implement austerity programmes that have already failed. What we will do is to cancel the programmes that are sinking us into recession and renegotiate on a European level the necessary changes that will change the difficult economic situation in Greece and in Europe.

But the £11bn euros of austerity measures supposed to be implemented by end of June – would you go ahead with those?

I would like you to imagine that there were no elections in Greece, that Syriza wasn’t as popular, and there was no chance for Syriza to form a government, that we continued to have a government from the two main parties who want to implement the austerity measures. Do you really believe they could actually implement the measures in a destroyed economy, on a people in these trying circumstances?

New austerity measures of £11bn euros – practically this cannot be implemented; and before they were asked to implement it, they would realise that they wouldn’t be able to do it and they would start discussing it again, for a new bailout package and a second restructuring of the debt. So we are asking our European partners to realise that the problem is not Syriza that wants to disrupt a smooth process. The problem is that the austerity measures failed and it is not possible to implement them.

But the Bundesbank says Greece’s exit is “manageable”, countries say they are making contingency plans. Are you saying that they are bluffing, that they are not serious?

Today all over Europe everyone realises that this is not a Greek problem but a European one, and that if one country leaves the eurozone, the markets will start looking for the next. I don’t know if the German bank is bluffing or making a wrong estimation. What is sure is that nobody would dare to take such a big responsibility to blow sky high the second biggest currency in the world.

The fact that the media are showing so much interest in me and Syriza – it is not because suddenly someone appeared who made fun of the big leaders, it is because they realise that if I insist on the commitments I took before the elections, they (political leaders) will find themselves facing up to their responsibilities: to either change the austerity recipe which is destroying Europe, or blow up Europe.

What if they are not bluffing? What if they do not budge? Are you prepared for the consequence of Greece leaving the Euro?

I don’t believe that something like this can happen. I don’t believe it could happen because when Mrs Merkel talked to the BBC and said that if one country leaves, the next day we have to start looking for the next one, it might be Italy, it might be Spain. Italy has a 1.9tr euro deficit, Greece has only 350bn euro deficit, so I don’t believe something like this could happen.

In any case, we are here to try and get the best possible deal for the Greek people. The road we are on today leads us directly to catastrophe. By saying that this road is a dead end, we are asking Europeans to take their responsibilities. We are telling them we are at your disposal and we want to talk, we want to discuss, to find an alternative road, to try and find a solution together for the whole of Europe. For sure, the solution is not to implement the austerity measures.

Basically the choice David Cameron and other leaders say faces Greece – you are saying there is no choice, that you can have your cake and you can eat it, you can stay in the euro and water down austerity. Is that right?

I believe we find ourselves in a situation equivalent to the one the US found itself in with Russia, back during the days of the cold war. Both sides had nuclear weapons in their hands, and both sides threatened to push the button and activate. When you have a cold war neither side will back down, so now we don’t expect Mrs Merkel or Mr Cameron to back down either. We are quite sure that when the time comes, logic will prevail and they will not activate their nuclear weapons.

Because if there is no compromise, when it comes to July your country will not be able to pay the pensions and the wages of your people if the bailout money is withdrawn?

Yes, this is a big disadvantage we have at the moment. Greece has a core deficit of 2bn euros without taking into consideration the recession. And this is a big threat the other side is using, by saying that they will stop the funding.

On the other hand, our advantage is that if the funds stop coming in, we will have to stop paying our creditors. That would result in a domino effect in the financial markets all over Europe and create a devastating storm all over Europe. This is what I said before.

Both sides have nuclear weapons in their hands. And the big issue is to try and find a solution so that neither of the two sides pushes the button, because if something like this happens, no-one will benefit. So what we are asking from Madame Merkel is to lower her ego and realise that the austerity measures policy is the wrong one and try to cooperate with us over a common solution that will help development and the maintenance of social structure.

Read more: Europe prepares for ‘amicable divorce’

Protesters run away from police after hurling petrol bombs during violent anti-austerity demonstration in central Athens (Reuters)

So if you do form a government next month, your first task would be to go to Berlin to try to persuade Angela Merkel to change her mind?

The first thing that we will do is to cancel in the Greek parliament the measures that Greek parliament adopted. The measures which make the recession deeper, the measures which force us to sink deeper into crisis. The second thing will be to look for alliances in the European south with the countries which find themselves in a similar situation to us – with Portugal, Ireland, Spain and Italy.

The second step would be to try and start a dialogue with France. There was a political change there. We now wait to see if Mr Hollande will stick to the commitments he took before the election. We will also go to Madame Merkel and ask her to realise that she bears a big responsibility because she decides in the name of all the people in Europe and all the people in Germany, to change her political message in order to save Europe. Or else, all of Europe will blow up and this is not in anyone’s interest.

Can you not see the advantage of returning to the drachma because it would make your currency more competitive?

There are too many disadvantages to this option, and that is why it is not our choice. The national currency of Greece is the euro. Even if we go back to the drachma, we will be faced with a reality where we have to pay salaries in a cheap currency like the drachma, but rich people will have their money in euros abroad and they will be able to come and buy everything here.

It is not the same as what happened in Argentina. There they had a currency directly connected with the peso, the dollar. So it is not our choice to return to the drachma and we will do whatever is possible to avoid something like this.