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Grexit: Perspectives From Around Europe

Greece’s exit from the Eurozone – once discussed in vague terms – is now truly a possibility. Its banks are shut and running out of cash fast. If it leaves the Eurozone, Greece as a country could go bankrupt which would potentially be more painful than the austerity measures for the Greek population. Fundamentally, the Grexit crisis centres around Greece’s willingness to reform and make good on its debt commitments to its European partners, the IMF and others. Europeans are quickly losing patience, both with Greece’s perceived arrogance and ability to take seriously the obligations it has to creditors, and the enthusiastic way in which it is staring into – and potentially jumping into – the financial abyss.  Yesterday, the Syriza government submitted a ‘thorough’ offer to its creditors on time. How they react is yet to be seen after Sunday’s Eurozone summit.

The following are first set comments from Edelman’s public affairs experts in the different European member states on the recent developments surrounding a potential ‘Grexit’:

Brussels: I Am Angry

Mr. Guy Verhofstadt’s “I am angry” speech delivered on Wednesday at the European Parliament, in the presence of the Greek Prime-Minister Mr. Tsipras, was a huge success on social media. Currently it has been viewed on YouTube by more people than took part in the referendum last week. This is, in itself, quite an achievement. Indeed, it is not often that a speech by a Member of the European Parliament makes news headlines EU-wide and is shared and watched online by hundreds of thousands of viewers. We hadn’t witnessed such oratory drama since Daniel Cohn-Bendit left the European Parliament.

It seems Mr. Verhofstadt’s emotional plea for the Greek Government to table concrete reform proposals was heard: yesterday the Greek Government submitted a new proposal which, to the surprise of many, contains a package of austerity measures, which would appear to go beyond the proposal that the Greek people rejected by referendum last Sunday. Although there was no official reaction by Greece’s creditors yet, the first unofficial reactions in Brussels to this proposal were rather positive. The general feeling is that the Greek proposal is a good basis to allow further negotiations, which would avoid any dramatic outcomes happening over the weekend.

According to many commentators in Brussels, even though Tsipras gained almost nothing by holding a referendum, he will now be able to show his supporters that he fought until the very last minute, before conceding to the demands of creditors. This could potentially help him to keep the coalition intact and implement the proposed reforms.

However, the Greek Government cornered itself into a very uncomfortable position: it received last Sunday a wide popular mandate to end austerity while remaining in the Euro. Mr. Tsipras knows he won’t be able to deliver on both. Although the latest Greek proposal would seem to indicate that the government is prioritizing remaining in the Euro over ending austerity, there is some skepticism in Brussels on whether the current Greek government will be able to deliver on anything at all. Will the Syriza party support the Government’s proposal? Will the Greek Parliament endorse the new plan? How will the Greeks react to this apparent volte-face by their Government just a few days after they rejected austerity?

The Greek proposal allowed a few additional hours of hope, but the coming days will be decisive for Greece, and for the Euro area.

Written by Miguel da Silva, Director, European Food Policy, Edelman Brussels and Simas Gerdvila, account executive in Public Affairs, Edelman Brussels

Germany: Trust must be earned, it will not be given

Germany has remained adamant in its call for reform programmes during the Eurozone crisis. Much is similar to the financial crisis 2009/2010, with experts criticizing Germany and Merkel for austerity and demanding the gearing up of Government spending as an economic solution instead. Also today, the focus is yet again on Merkel and Germany – as if she is the problem. She is not.  To understand the German – and European – position, one must have a look at how Merkel functions. Her way of governing the crisis reflects her approach to problem solving – analyse the problem, define policy options, do what we believe is right and do it well. Merkel will not simply run into a burning house in a popular rescue action. In practical terms, this has meant that Germany is focused on mid- and long term Greek reform programmes for solid budget solutions rather than one-off populist infusions. Critics call this austerity, however the German perspective on these political realities call it common sense.

Those that call for Merkel to end painful reform programmes in Europe overestimate Germany and others’ ability to push through reforms outside of their own member state. Ultimately, if Greece is to reform – it has to do it itself.  Merkel enjoys significant stability and popularity at home and as a result her political fate will not be tied to whether Greece stays in or leaves the Eurozone.  Merkel will be judged on whether Germany – as the leading economy of Europe – continues to deliver economic growth and stability for Europe and the world. The Greek doomsday rhetoric focused on European ‘solidarity’ will not earn any trust from Merkel, Germany, nor the Member States.  Solidarity does not come at any price – Greece must manage its spending problem. But if and when Greece showcases true ambition to overcome its problems, then there will be both financial and political support from Germany and from Europe. This is in the interest of Europe. And Greece.

Written by Bernd Buschhausen, Head of Public Affairs, Edelman Germany

Italy: The future of Europe is a bigger problem than Greece

Italian Prime Minister Renzi said that the difficulties of mapping out the future direction of the European Union is bigger than the Greek debt crisis. “What kind of Europe do we want in the future?” Renzi has previously said. “Our intelligence is required to build a political Europe, not just an economic one”. Italy’s perspective is focused on how the EU as a whole will move forward, rather than the fate of a single country.  The Prime Minister believes that – if there is political will – a technical solution for Greece can be found quite easily.  Italy is focused on finding a political outlook for Europe, which right now isn’t working. Renzi, focusing on Europe’s future, reiterated his calls for “more growth, more future and more innovation.”

Written by Fiorella Passoni, General Manager, Edelman Italy

UK: ‘Whatever Greece decides, Britain is prepared.’

This was the statement made by the Chancellor, George Osborne, last weekend. The comment goes some way to encapsulate the UK’s position on the emerging challenge in Greece. The Prime Minister and key Government spokespeople have been clear to outline this as being an issue for the single currency states to resolve. The Government focus therefore has been restricted to the impact on UK citizens living and visiting Greece in the weeks and months ahead. The included guidance from the UK Foreign Office stretching from currency through to medical supplies. Whilst the official message seems to be one of reassurance, in private the Government remains concerned. A Eurozone crisis runs the risk of contagion and inflicting harm on the Government’s strong economic growth over the last few years.

Written by Gurpreet Brar, Managing Director, Public Affairs, Edelman UK

France: The ambivalent perspective of the Grexit

President Hollande faces both a European and national political challenge. During the presidential campaign in 2012, as candidate, François Hollande committed to provide a new political orientation in Europe. The Socialist majority and its allies (The Greens and far left parties) are now asking the President to achieve his commitments by supporting Greece and impose his view to Angela Merkel. In France, the perception of the Grexit is no longer an economic or financial crisis – it has evolved into a political one. French public opinion is very contradictory on this: the French don’t want to pay anymore for Greeks (as the Germans) but they do not want to see Greece leaving the Eurozone and the EU at the end of the day.   President Hollande and his Government have to manage this contradiction. But, at the same time, the trust in the French leadership is weak. For the French public opinion President Hollande has not enough leadership and influence… A recent opinion poll showed that the French trust Angela Merkel a lot more than Francois Hollande to find a solution on this crisis (44 percent for Merkel versus 24 percent for Hollande). France and its President seem to have no control over the event to influence the situation and it questions its role and place in Europe for the future.

Written by Stéphane Harrouch, Associate Director, Public Affairs, Edelman Elan

Miguel da Silva, director of European Food Policy, Edelman Brussels
Simas Gerdvila, account executive in Public AffairsEdelman Brussels

Bernd Buschhausen, head of Public Affairs, Edelman Germany
Fiorella Passoni, general manager, Edelman Italy
Gurpreet Brar, managing director, Public Affairs, Edelman UK
Stéphane Harrouch, associate director in Public Affairs, Edelman Elan

Image by Bill Anastasiou via Shutterstock.
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