martin schulz 'Alexis Tsipras Is Manipulating People'

Martin Schulz, the president of the European Parliament, spoke with Handelsblatt about the euro crisis, his anger over Greek Prime Minister Alexis Tsipras’ actions and his hope for this weekend’s referendum.
Won't be drinking ouzo with Alexis Tsipras anytime soon: Martin Schulz.

During Handelsblatt’s recent visit to the offices of Martin Schulz, the president of the European Parliament was outraged to hear that Greek Prime Minister Alexis Tsipras had just recommended his people vote “No” in the upcoming referendum on the reform package demanded by Greece’s international creditors.

 

Handelsblatt: Mr. President, are you still talking to Alexis Tsipras?

Martin Schulz: Yes. I haven’t given up hope that we can find a solution together and save Greece from sovereign default. But my faith in the willingness of the Greek government to negotiate has hit rock bottom.

Mr. Tsipras is stoking people's resentment against their European partners. How does that feel?

It’s not easy. Mr. Tsipras is unpredictable and is manipulating people in Greece, it's almost like demagoguery. Both I and E.U. Commission President Jean-Claude Juncker spoke with him just yesterday morning. Mr. Tsipras asked us to come to Athens to discuss another aid program.

Are you going to go?

We seriously considered it, if only to send a signal to the Greek people. The mood in Greece appears to be tipping in Europe’s favor, it's not a given that they'll reject that in the referendum. We had hoped that Mr. Tsipras had perhaps come to his senses. But it turned out to be another diversion apparently.

Apparently the Greek prime minister believes the euro zone won’t abandon his country. He’s using that to get an even better deal.

Mr. Tsipras always claims that the reforms demanded are tantamount to an unbearable austerity diktat. That’s not true. The euro zone’s offer to Greece is well intended. Many finance ministers think the compromises already go much too far. If this offer is rejected as a supposed humiliation for the Greek people, then it’s an illusion to think there will be a new, better one.

Does that mean Greece’s fate is sealed?

No, there’s still a chance. We hope that the Greeks will vote "Yes" in the referendum to the creditors' demands. That would mean the people showing their government a red card. Mr. Tsipras would have to accept the consequences and, in my opinion, resign. He has signaled that in the past few days. His finance minister Yanis Varoufakis as well.

What would happen next?

New elections would be necessary, if the Greek population votes for the reform program and remaining in the euro zone and Mr. Tsipras duly resigns. But the time until the election would have to be bridged with a technocratic government, which we could keep negotiating with. If this temporary government can come to a reasonable agreement with the creditors, Syriza's time would be over. Then Greece would have another chance.

And what happens when the majority of Greeks vote "No"?

The negotiating partners are so far apart that it would be a hard path for Greece. We could no longer negotiate in good conscience if the Greek people vote "No" and turn away from the euro and Europe. There might be an emergency program at that point, to keep the country going.

A sovereign default within the currency union is a financial and political meltdown. Is the euro zone in danger?

I feared at times that Greece would blow up the euro zone. Some experts claim that, but it fortunately doesn’t seem to be the case. The markets have apparently already priced in Greece’s departure from the common currency. Some euro zone finance ministers also think that’s the case. Politically, however, it would be a heavy blow if a member state left. That’s also why I won’t give up hope that we can avoid a Grexit.

 

</a> Not exactly friends: Mr. Schulz and Alexis Tsipras.

 

Following five years of bailouts and austerity, Greece is doing worse than ever. Can the country be helped?

We discuss that every day. The more closely I look into it, the more I’m convinced that this country needs fundamental reform, for its entire economic system and political administration to be modernized. Special interests and unfortunately occasionally corruption are undermining the entire system.

Does a country like that even belong in the euro zone?

Ten million people live in Greece. That alone means we have to try to somehow stabilize the country. If Greece returns to the drachma, it will be finished. We can only draw investors to the country when it has a hard currency and legal certainty. It has promising economic sectors: tourism, solar energy, agriculture. We need to support these areas with investment. The country needs a growth plan. We can and want to help with that.

In Berlin, there are serious discussions about taking over Greek debt from the IMF and ECB and bundling it all with the ESM. Is that a possible solution?

Jean-Claude Juncker was against the IMF’s participation in the Greek bailout back when he was the head of the Eurogroup [of euro-zone finance ministers, Eds.]. And in 2009, I was one of those in the SPD [Germany's Social Democrats, Eds.] opposed to bringing in the IMF. The IMF has failed frequently with its fixation on austerity – just look at Argentina, for example.

"If the euro fails, Europe fails,” is what German Chancellor Angela Merkel said. Will that happen on Sunday if the Greeks reject the creditors’ reform package?

The euro won’t fail because of the Greek crisis. It will remain a stable currency. But we have to accept one thing: The dream that we would grow together politically with a common currency has not come true. Helmut Kohl’s realization that the currency union wouldn’t work without a political union, however, is still valid.

If that’s true, the euro will soon vanish. The euro zone is far from a political union.

We are a union of sovereign states with a common currency but without a common economic policy. If it remains that way, the danger will grow that the euro won't bring us together but drive us apart. That’s why I can only urgently call for the euro zone to have the instruments it needs to manage a common economic policy. The banking union is a first step in this direction.

A Greek departure could end up pushing the rest of the euro zone closer together. Shouldn’t we be grateful to Mr. Tsipras for that?

I don’t really feed gratitude towards Mr. Tsipras, my feelings are different right now. And I honestly don’t see the Greek situation sparking the much-needed integration push for economic policy yet. That’s the problem – despite this crisis, too little is being done.

 

Sven Afhüppe is Handelsblatt's co-editor in chief, Ruth Berschens is Brussels correspondent for Handelsblatt. To contact them: [email protected] and [email protected]