The debt crisis in Greece, the possibility of exit from the Euro, the possibility of a crisis of confidence in Greece’s ability to pay its debts spreading to other Eurozone members have led to events which challenge Greek sovereignty. That is in the efforts negotiated between Greece and the European Union, in practice largely negotiated with the government of Germany, for Greece to largely cancel its debt in return for fiscal and economic policies which will convince financial markets that it will not build up new unmanageable debt, and that it will be able to generate increasing prosperity for its citizens in a sustainable manner. This means in practice that Greece surrenders some sovereignty to representatives of European Union, European Central Bank, IMF, the German government, who check Greek polices and keep credit lines open in return. There are some similarities in Italy and Ireland, but Greece is the most dramatic case, and we will keep the focus Hellenic in this post.
One reaction to this, is to refer to some destruction of Greek democracy at the hands of the European Union and the government of Germany, and to claim that there is some foreign dictatorship over Greece, as a novelty invented by the EU/Germany. The main focus of this post is Greek history, as a history of foreign intervention, but a few words on the current dictatorship claims.
Greece is a member of the European Union by choice and it is a member of the Eurozone by choice. Three EU countries negotiated opt outs from the Euro, the UK, Denmark and Sweden. Greece made no effort to do so. Greece’s fiscal and economic plight is of its own creation, arising from the lack of political will to fund public spending with effectively collected taxes. While during the Euro period before the crisis, Greece made some economic reforms, cutting subsidies to the state railway is one which comes to mind, it was too little to make Greece the sort of competitive economy which could sustain being in the same currency zone as Germany, the Netherlands and Finland. The biggest criticisms that could be made of powerful EU countries is that they failed to apply the fiscal rigours (wit regard to limiting public deficits and debt) to themselves, and German export industries benefitted from a low effective exchange rate when selling goods to Greece. The last point had a period of fashion which passed, presumably because in practice German exports have not boomed since the launch of the Euro, so the idea that Germany rigged the Eurozone to suit its export oriented industries lacks supporting evidence. While a Greek decision to default on all its debt (and nearly of it has already been written off in practice under current arrangements) and leave the Eurozone would be highly unpopular with the EU and all member governments (even the more Eurosceptic governments would be concerned about the turmoil on international currency markets which would lead to pressure on other currencies), and there would be some Greek loss from the resulting harm to good will, Greece is free to leave and would do so if Greeks voted for a government devoted to such a policies. Greeks have not voted for such a government. Two general elections this year have not led in either case to a majority in the national assembly for default and leave. The results of these elections mean that though the Greek public may not love current austerity polices negotiated with Brussels, Berlin etc, and are indeed in many cases suffering hardship, the Greek public in its majority, regard this as the less bad option. Respect for democracy means respect for the Greek electorate’s decision rather than poorly reasoned ranting about dictatorship.
The above is all important, but my main concern is to point out that Greek loss of sovereignty and debt crises are not something new, and are not something invented by the EU. Greece emerged under international tutelage, because it suited Russia, France and Britain to support Greek independence from the Ottoman Empire. Though there were certainly genuine sentiments in favour of Greek independence at the time, there are other reasons for great powers of the time supporting independence. France wanted to colonise Ottoman lands in north Africa, a task greatly eased by destruction of the Ottoman fleet. Britain wanted to increase its influence in the eastern Mediterranean, and reduce Ottoman influence, and Russia wanted a co-religonist state south-east Europe, weakening the Ottoman Empire, and even bringing near the prospect of a Russian controlled Constantinople.
The outcome was that these three countries decided to assist Greek nationalists against the Ottomans and their Egyptian allies. It is unlikely that Greece would have become independent when it did, 1830, without that intervention. The early Greek state was chronically unstable, and after the assassination of the first ruler of independent Greece in 1831, a German prince was sent to be king, essentially by command of the three powers under the Treaty of London, which treated Greece as a protectorate. Greek sovereignty was asserted by the 1862 deposal of King Otto, but his successor, King George from Denmark, was also chosen by the three powers.
The attitude to Greece’s sovereignty at this time can be gauged by the Don Pacifico incident of 1850 when Britain sent a naval squadron to blockade the Piraeus (the port of Athens) to force the government to compensate a British citizen. Effective exercise of Greek sovereignty was further hampered by four debt defaults crises during the 19th century: 1826 (preceding official independence!, relating to the purchase of warships for the revolutionary navy), 1843, 1860 and 1893. There was another default in 1932. The result of these defaults, which meant periods of years afterwards in which Greece was in default to creditors, meant that Greece was in default for 90 years of its post-Ottoman existence before the present crisis!
The defaults limited Greece’s sovereignty, which was further limited not only the wish to France, Britain and Russia to treat Greece as a protectorate, but also by extremes of internal political conflict which go back to the Independence War, and include the period of the 1919-1921 war with Turkey. There were even rival governments in different Greek cities during World War One. That kind of instability itself legitimised the intervention of outside powers.
The most extreme loss of Greek sovereignty took place during the Nazi occupation of Greece from 1940 to 1945, though mostly ended in 194. This is part of a well known terrible period in European history affecting many countries,i and we can treat it as an exception. More significantly with regard to Greek history as a whole, there was a Civil war from 1946 to 1949 pitting a communist dominated left against an authoritarian leaning right. That war reflects a long pattern of violent left-right cleavage, though previous conflicts were more between liberal republicanism and authoritarian royalism. The Civil War had its roots in conflicts between different factions of the Greek Resistance to the Nazi occupation. The left received help from the Communist led countries during the Civil War (though probably Stalin never meant that help to be sufficient to undermine a previous agreement with Britain and the US that Greece could stay outside of the Soviet bloc), while the right received help first primarily from Britain, and then America. The end of the Civil War was a victory of British-US backed forces, leading to a period of constitutional democracy, but with authoritarian characteristics.
The hard right, the royal family and the military found even the limited democracy of the post-war period difficult to live with, but were themselves deeply split about the solution. In 1967, a group of army colonels seized power and provided the solution. The United States has acknowledged since that it played a role in the 1967 coup, and Bill Clinton expressed his regrets while President (I presume national security conservatives in America are still fuming about this betrayal and softness). So the post-war political settlement in Greece decided by the United States, which further readjusted to abandon all pretence at democracy. Fortunately the terrible anti-democratic history ended with the fall of the Colonels in 1974. Greece joined the European Union in 1981 confirming the transition to democracy, in which centre right and centre left governments were able to hold office without fear of internal or external subversion.
Looking at the current agreed consultation with external powers to overcome the Euro crisis, we see something much more moderate, consensual and democratic than previous Greek history. Elected governments have tried to preserve Greece’s place in the Euro and its credit lines, through negotiation with governments in other democracies, and international organisations which work through consensus not gunships or imposing heads of state. If we wish to be more dramatic about the crisis we could say that Greece has gone some way towards being an unstable protectorate of the EU, but compared with previous crises, its a very mild and benign form of agreed intervention.