The election of an anti-austerity Syriza government in Greece signalled trouble for the powers-that-be in the European Union. Principally Germany which has no interest in rethinking how the EU operates, since it serves German interests so well, but also the most powerful European institution: the European Central Bank (ECB).
As of Saturday, June 27, it is clear what Syriza was up against. As Greek Finance Minister Yanis Varoufakis explained, the Eurogroup (finance ministers from the 19 countries that use the euro — collectively, the Eurozone) was never prepared to discuss the anti-austerity proposals put forward by Syriza and provide debt relief for Greece.
All that the Eurogroup membership intended was to extract from Greece a commitment to continue to practice austerity under the terms set out in existing agreements with the Troika (the EU Commission, the ECB, and the International Monetary Fund), and continue to pay down debt at the cost of shrinking the Greek economy — already smaller by 25 per cent thanks to austerity — further.
Led by German Finance Minister Wolfgang SchÃ¤uble, the European finance ministers ignored the two basic principles of public finance. One, if debts are too large to be repaid, they will not be. Two, any agreement with a debtor country must be acceptable to the citizens of that country.