The Troika (the IMF, the ECB and the European Council) knocked back the Syriza leadership's proposal and are ramping up the price for the release of the 7 billion euros which is the last bit of the bailout funds that the EU had already agreed before Syriza won the Greek election last January.
92% of the 252 billion euro bail out launched in 2010 has so far gone in debt payments to European banks and other original lenders (59%), to Greek banks (19%) and in incentives to private Greek bond holders (14%.) Only 8% of the bailout has so far gone into the Greek Government's budget. The remaining 7 billion euros of the original bailout will go almost entirely into debt repayments to the IMF at the end of June and to the ECB later in the summer.
The Troika allows European political leaders and their paymasters to play good cop / bad cop. This is useful for example for Merkel as she faces powerful pressure from the US to settle with Greece for geo-political reasons. Nevertheless, what is playing out now is a thoroughly co-ordinated political strategy. Already Syriza leader Tsipras faces objections from the left in Greece for his original compromise - particularly on pension age. It is clear that while fomenting the colonels and getting Golden Dawn once again on the streets would require serious unrest against the Syriza government to work - and that is not available (Syriza's popularity remains high) regrouping the Greek parliament over the head of Syriza, through provoking a split in the governing party, that seems more than possible.
Of course it would be better for Greece and Syriza if the European leadership gave way to a policy of growth in Greece. But even if they have no such intention they still underrate the political maturity and culture of the Greek people and of Syriza's leaders and its organisers. Certainly any harsh compromise with the Troika would lead to a battle inside the Greek Parliament and outside it for sure. But then the argument about Greece's relationship with the Euro would really open out in society - as it has to anyway - even if there is no compromise agreed by the Syriza leaders in Brussels and they default on the IMF loan. And it is not at all beyond the realms of possibility that democratic ways would be found of discussing the question and of resolving it. The results of the clash with the Troika can be managed. Of course, either way, if a poor deal is closed by Syriza's leaders, or if there is no deal, retreats, even defeats are sometimes unavoidable and must be faced. And it starts with the Euro. Stepping away from the Euro and repudiating the 317 billion euro debt would, however necessary, create Greece's greatest emergency since the military coup in 1967 and would need to be thoroughly and democratically prepared. Initially there would be big sacrifices. But Greeks have already put up with great sacrifices for the best part of a decade - and that was for nothing. Worse, it was for ending up in a poorer position today with no possibility of of altering the direction of travel in the foreseeable future.
Whatever the political questions that emerge in Greece about the latest talks in Brussels, possibly including an answer to a new question of who will now constitute the anti-austerity political leadership in the Greek parliament in the eyes of the Greek people, the essence of the Greek crisis remains the debt. That is the political and economic question of questions facing Greece. The debt is the instrument that European capital has decided to use to create the politics it would favour across the whole of Europe, whether countries are loaners or debtors. Greece is currently leading a European wide movement against those politics and economics. The rest of us need to put our shoulders to the wheel.
A good starting place is the Jubilee Debt Campaign's international on-line petition for a European debt conference, starting with Geece. Yesterday, a meeting of MPs in Parliament agreed to launch an Early Day Motion based on the Jubilee Debt Campaign's petition. Get hold of 'Drop It' from the same source. It explains everything people need to know about the debt.
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