Greek deal is a Pyrrhic win for both sides

By humiliating Athens, Europe hasn’t done much for the union – or indeed for growth

Christine Lagarde, managing director of the International Monetary Fund (IMF), left, speaks with Euclid Tsakalotos, Greece's finance minister (Photographer: Jasper Juinen/Bloomberg)

Anticlimax is the word that comes to mind now that Eurozone leaders have reached “unanimous” agreement in the long-running Greek drama. After about 17 hours of discussion in Brussels and many months of crisis-driven manoeuvres that would not have been out of place on a racing track – sudden braking, skidding, bottoming out, high-speed hairpin bends, pit stops – European leaders announced that they had agreed in principle “to start negotiations on ... continued financial support for Greece”. European equity markets surged on the back of the news. In a somewhat cringeworthy attempt at the perfect celebratory sound bite, the president of the European Union, Donald Tusk, declared “we have an agreekment”. And Greek prime minister Alexis Tsipras launched an equally cringe-inducing attempt to bluster his way out of the embarrassment he must surely feel about his U-turn in seeking this particular deal. For it includes conditions harsher than those his government had previously rejected and over which they had boldly called a referendum that cost cash-strapped Athens at least €20 million (Dh81.37m). But with the politician’s brazen ability to dissemble, Mr Tsipras now says that Greece fought a “tough battle”, won debt restructuring and sent a message of dignity to all of Europe.

This is disingenuous, though it is at least true that Greece fought a tough battle. Mr Tsipras and his combative former finance minister Yanis Varoufakis frittered away the six months since their far left Syriza Party was elected, playing to the gallery, grandstanding, steering the ship of state with all the daredevilry of Formula One drivers, promising their citizens peace and plenitude and approaching every Eurozone session with high-minded disdain. But they were doing all this with empty coffers and with no apparent plan for recovery, while their long-suffering people pitifully pleaded for an end to financial austerity. Perhaps Syriza behaved like this because of its administrative inexperience. Whatever it was, Mr Tsipras’s bluff was called by European leaders and his nearly bankrupt country forced to accept terms that will open the banks in the short term, but leave no room for growth – or pleasure – for years and years.

As the Europe director of the Economist Intelligence Unit puts it, the likelihood of Grexit has merely shifted from the next three months to before 2019 because “the chances of successful implementation are low”, 62 per cent of the population having explicitly rejected it a week ago. Clearly, Greeks’ sense of grievance will only grow and the Germans in particular will be accused of wanting to rule Europe rather than be a partner in it. Though Greece is still in the club, there’s probably less European Union after the deal.