Grexit lessons for Brexit

26/2/2019

By Tony Barber

Greek former finance minister says incompetence and ignorance are common themes

In the first half of this decade Greece almost crashed out of the eurozone, or faced having its membership suspended, in a process known as Grexit. With the UK one month from its scheduled withdrawal from the EU, and no one sure what will actually happen, what lessons does Grexit hold for Brexit?

George Papaconstantinou published an article on this subject last week on ING bank’s website. As Greece’s finance minister from October 2009 to June 2011, he was at the centre of events during the early phase of his nation’s sovereign debt crisis. He draws telling comparisons between the painful negotiations of successive Greek governments with the EU and the stumbling efforts of the UK government under Theresa May.

The common themes are weakness, breathtaking ignorance, incompetence and internal political splits on the Greek and UK sides, contrasted with strength, expert knowledge, professionalism and solidarity on the EU side.

“Just like Greece, the UK lacked an understanding of the EU’s political and institutional dynamics. This led to a flawed negotiating strategy... As with Grexit, time has worked in the EU’s favour. By 2015, the EU was better prepared to manage a possible Grexit; so it is today with Brexit,” Mr Papaconstantinou writes.

He draws attention to “the UK’s shambolic internal decision-making on Brexit”, so similar to the manner in which one Greek government after another lost the EU’s trust by appearing unable to make up its mind, keep promises or refrain from provocative complaints about EU bullying and blindness. All this “reinforced the EU’s inclination to embrace caution” and to “focus on its own unity”, he says.

Obviously, important differences separate the Greek and British cases. The UK is on course for Brexit not simply because of its 2016 referendum result, but because of a long history of semi-detached relations with the EU and an even longer history of distinctive national identity and development.

By contrast, Greece moved closer to the European mainstream after shaking off military rule in 1974, entering the old European Economic Community in 1981 and achieving eurozone membership in 2001. It was to preserve this sense of national modernisation that Alexis Tsipras, prime minister, ended his defiance and accepted Greece’s harsh third EU-led bailout in August 2015.

A comparison between Mr Tsipras and Mrs May reveals other differences. The Greek premier, once regarded in EU capitals as a loud-mouthed nuisance at best, a detestable revolutionary at worst, now luxuriates in the EU’s good books. The EU praises his deal with the former Yugoslav republic of Macedonia over that state’s name as statesmanship of the highest order.

Mr Tsipras wins admiration for helping to contain Europe’s refugee and migrant troubles on the front line with Turkey, and for resisting the temptation to copy other EU politicians and dabble in xenophobic populism. If ever Greece were to need more emergency financial assistance — the fragility of its banks is certainly a concern — its requests may well receive a sympathetic hearing because of the responsible behaviour of Athens on other issues.

Mrs May commands no such respect in EU circles. There used to be some sympathy for her as the hard-working leader of a government and country deeply divided on Brexit. Slowly, however, patience has worn thin with what EU leaders see as her peculiar combination of stubbornness and indecisiveness, even as the Brexit clock ticks towards midnight.

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