Washington Monthly - September/October 2015 - 16

now saying that because it's clear (as Tsipras has long maintained) that Greece cannot repay all its loans, the IMF won't sign off on any deal that doesn't include further debt relief. But the IMF was moving in that direction anyway. I do think, however, that Greece's resistance led to a substantial change in elite world opinion. Back in the spring, when I talked to friends-worldly, plugged-in, liberal-leaning people-their attitude was "Why can't those Greeks get their house in order?" That was a fair reflection of how the story was being covered in the media, with most of the blame put on Greece for its (quite real) fiscal profligacy and chicanery and the erratic behavior of its negotiators. But over time, the coverage shifted. More and more stories emphasized the injustice of a German-led austerity regime that had failed for five years to work as advertised and was only eviscerating average Greeks (and possibly driving the country into the arms of Russia, which has dangled the possibility of aid). Then, in July, Germany's finance minister, Wolfgang Schäuble, admitted publicly what he's long been saying privately: he wants Greece out of the euro. He didn't get his way; France and Italy insisted Greece should be allowed to stay. But the terms of the deal Schäuble finally got Tsipras to agree to were shockingly severe; even Der Spiegel, Germany's biggest newsmagazine, labeled them "a catalog of horrors." The deal is actually worse than the press has portrayed it. The Greek economy has long been dominated by a few dozen wealthy families, known as "the oligarchs." They own the country's major media outlets, control its politicians, and support the stifling business regulations that keep out competition and allow them to dominate government contracting. The oligarchs have long since moved much of their money out of Greece. But when the mandated privatizations begin, they will likely use those funds-currently safely ensconced in offshore or European banks-to buy government assets at fire- sale prices, thus increasing their grip on the country. In the aftermath of the deal, Germany's reputation has taken a well-deserved beating, and the elite press has been filled with speculation about whether this raw display of German power might eventually lead other countries, like France and Italy, who chafe under that power themselves, to leave the euro. I lived in Germany for a year and am fond of the country and its people. But Tsipras made a point to me in his interview that, though it infuriates the German government, still holds true: "Back in 1953, under the London Debt Agreement, America asked European countries, including Greece, to agree to write off 60 percent of Germany's debts from World War II and to put a moratorium on debt repayments. That was accepted as a solution. What we are asking from Germany is basically the same." Paul Glastris is the editor in chief of the Washington Monthly. unlimited horizons 150-year commitment to experiential learning | Carnegie Foundation community engagement college Rich study-abroad tradition with distinctive Global Laboratory | More than 100 academic programs, from accounting to zoology | Vibrant residential community on New York's north coast A Kiplinger's and USA Today/Princeton Review "Best Value" college Learn more oswego.edu/admissions email: 16 admiss@oswego.edu September/October 2015 315.312.2250 http://www.oswego.edu/admissions http://www.oswego.edu/admissions

Table of Contents for the Digital Edition of Washington Monthly - September/October 2015