Fifty Shades of Greece – A Story of Pain & Pleasure(coming soon) George Papandreou cancelling his referendum was a capitulation. Tsipras and Varoufakis reaching four months and flexibility and new space to achieve a truly new strategy was quite an accomplishment.

There’s much debate concerning whether, and what, Greece won or lost as eurozone parliaments vote on the Greek reform deal agreed by finance ministers earlier this week.

Did the new Greek authorities really ruin the trust of their eurozone counterparts, just to rules that are then capitulate on a deal, showing austerity nevertheless? Instead, is there some hope for unemployed or all those impoverished or otherwise hurt by the enforced austerity of the euro-disaster years? Is there more expect too for democracy across Europe? Or has been trampled under foot by eurozone finance ministers, the IMF along with the ECB?

Who blinked?
What came out of the eurozone finance ministers deliberations was, quite simply, a compromise deal between the other 18 eurozone member states as well as Greece. While media pundits brushed up on their understanding of game theory, the days leading up to this deal seemed in fact like a classic bargaining strategy from the Greek side which may be recognizable to any trade union leader: you put your maximum instance (with relevant threats – of strikes or work-to-rule etc.), the other side places theirs, and unless one side is completely weak you compromise somewhere in between – where exactly in between depending both on your bargaining strength and your bargaining ability.

That Yanis Varoufakis, as Greece’s finance minister, together with the intervention and support of Alexis Tsipras, Greece’s Prime Minister got some significant compromises for Greece, while not reaching everything Syriza first asked for, is a considerable accomplishment – since Greece’s strength compared to 18 other eurozone member nations is barely considerable. Portugal, Greece, Ireland and Cyprus have been ordered to throughout these years by the troika of the EU/European Commission, ECB and IMF.

Some of this one-way quasi-colonial rule has been only too public – not least the humiliation of former Greek Prime Minister, George Papandreou, forced by Angela Merkel followed rapidly by then French President Nikolas Sarkozy to withdraw a promised referendum at the conclusion of 2011.

Actual change or papering over a climbdown?
Some analysts dashed to assert that Greece had lost, any changes concurred being just decorative – such as now referring to the troika as ‘the associations’ (see for example Reuters’ analysis). Others, some in great detail, showed precisely how tough a battle had been fought as well as the space and concessions that was opened up as a result (see Norbert Haering’s excellent review).

Greece did really compromise. The bailout was prolonged for four months with a continuance of many, indeed most, of the reforms in the bailout programme.

But Greece also procured several things. Greece now has space to negotiate and argue for a lesser main budget surplus – the eurozone ministers permit this to be discussed, no longer simply imposed at 3-4.5% (increasing, as was the plan, from this year to next). Varoufakis and Tsipras have a fresh opportunity to claim for the 1.5% they have said makes more sense.

Greece got a recognition of the truth that it’s agreeing this four month deal as a ‘bridge’ to a fresh deal – one where the Greek government has been clear it is going to negociate for a major debt-restructuring to let debt payments linked to growth, and policies that will boost development. How successful Tsipras and Varoufakis will be in that discussion over the next four months is the vital question – but that will be the minute to judge whether the Syriza authorities has delivered on its promises.

Where next?

The lengthy four-month bailout for Greece, and also the associated reforms’ deal that has to now be executed, is just the very first stage in what is going to be a long and tough set of discussions and discussions.

What Tsipras and Varoufakis have reached isn’t just a brief if critical breathing space but crucially the start of a challenge to austerity in Greece and across the EU. The challenges for the next phase are considerably bigger: creating an agreement that allows truly growth-oriented policies, including letting, rate Keynes, demand to grow, and policies that handle not worsen inequality and poverty, will require more than just the rates of bargaining skill revealed by Greece so far.

But in exacting some compromise the new Greek government in the shortest of time, out of the EU eurogroup, has created some revitalisation of democracy and some hope in and beyond the borders in Greece, at a moment when it has never been needed more.

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