Did France pull Greece back from brink of Grexit?
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Observers of the Greek debt drama have credited France for helping revive talks after the fallout from Greece’s referendum left the country on the brink of Grexit.
President François Hollande described the Greek proposals as "serious and credible", saying Athens had "shown a determination to stay in the eurozone”. He also said the government’s decision to submit the proposals to Greek lawmakers showed "power, commitment and I would also say, courage”.
Earlier, Hollande’s economy minister, Emmanuel Macron, said Greece’s reform package “could meet the expectations” of eurozone creditors, before repeating calls for some form of debt relief – the Greek government’s central demand.
According to several media, French officials have at least one good reason to hail Greece’s proposals: they helped draft them.
On Thursday, several media including Le Figaro, the Guardian and the Wall Street Journal reported that France had dispatched a team of experts to Athens to ensure the Greek reform package was creditor-compatible.
Quoting unnamed sources at the French Finance Ministry, Le Monde said Friday that French experts had been working hand in hand with Greek negotiators for several days. “The Greeks hold the pen, but they’re using us as sparring-partners,” said one source. “We’re not telling them what to write, but advising them about which measures would be acceptable” to the creditors, added another.
Le Monde said members of the EU Commission were well aware of France’s involvement, adding that critics were keen to exaggerate the French role in order to stress the Syriza government’s alleged incompetence.
French journalist Jean Quatremer, a keen observer of the Greek debt crisis and EU politics, tweeted that “if the Eurogroup accepts Greece’s plan, we will have to thank @fhollande [the French president], who has been maneuvering talks over the past week”.
Others remarked that French leaders had been slow to react, allowing Germany to dictate the terms of crisis talks on Greece for months. “Nice to see the French standing up for a change,” tweeted the Guardian’s Ian Traynor.
‘Utmost geostrategic importance’
France hasn’t always been this vocal during the seemingly never-ending Greek drama. In fact, the French government kept a relatively low profile during the tortuous five months of negotiations that followed Alexis Tsipras’s election in January.
Paris gave Greece’s new prime minister a sympathetic hearing as he toured European capitals at the start of his mandate looking for debt relief. But French officials were noticeably non-committal when it came to supporting his pleas to ease the austerity measures imposed on Greece by its EU creditors.
All that changed two weeks ago after Tsipras caught creditors off-guard by announcing a referendum on austerity. Eurozone countries who had kept quiet about their desire to kick Greece out of the single currency suddenly came out all guns blazing. With Grexit looking increasingly likely, Paris also sprung to action, making it clear Greece’s exit from the euro was not an option.
Within minutes of Tsipras’s referendum triumph, Hollande called the Greek premier to warn him that Athens had but a few days to make new proposals to fuming creditors. “Help me to help you,” the French president added.
Since then, French officials have been relentless in their calls for a deal, endorsing the Greek government’s calls for some form of debt relief.
In a passionate speech before French lawmakers on Wednesday, Prime Minister Manuel Valls said France “refuses a Greek exit from the eurozone” and was doing “everything it can to bring all parties to a compromise”. Keeping Greece in the euro is of “utmost geostrategic and geopolitical importance” to France, Valls added.
Meanwhile, Economy Minister Emmanuel Macron said Greece should not be turned into another Versailles Treaty, referring to the post-World War I settlement that saddled Germany with unsustainable debt and helped foster the rise of Nazism.
‘One doesn’t expel Plato’
Like Germany’s Angela Merkel, French officials do not want to go down in history as those who presided over the break-up of the single currency union. Unlike their German counterparts, the French also feel a cultural affinity to Greece and firmly believe in the country’s role within the EU, which they like to see as more than merely a monetary union.
“One does not leave Plato waiting at the door of Europe,” former French President Valery Giscard d'Estaing famously said when the question of Greece’s membership of the EU first came up in the 1970s. On Thursday, EU Economy Commissioner Pierre Moscovici echoed that view by stating: “One does not expel Plato from Europe”.
Domestic politics are also at work as Hollande’s socialist government needs to cater to the increasingly disgruntled left-wing of his party and electorate.
It was not so long ago that France – not Greece – was the champion of Europe’s anti-austerity camp.
In the run-up to his successful presidential bid in 2012, Hollande was full of fiery rhetoric about ditching belt-tightening and promoting growth. The German chancellor, he said, would simply have to back down. As it turned out, Angela Merkel has barely budged.
In his first weeks in office, Hollande huffed and puffed but precious little happened. Paris did secure a vague pledge to promote growth in the EU, but Germany’s hallowed “stability pact” – which places a strict 3% cap on budget deficits across the EU – remained intact while Hollande’s cherished Eurobonds were junked.
Three years later, the only U-turn in economic policy has come from France itself, with the socialist government abandoning its traditional Keynesian ethos in favour of labour market reforms. Naturally, this prompted applause in Berlin and dismay among socialist supporters.
What better chance for Hollande to restore his left-wing credentials than by saving Greece from the clutches of austerity-mad creditors?