07/03/2015 08:42 PM

Operation 'Ochi'

Zero Hour for Greece

By , and

Prime Minister Alexis Tsipras has led his country into chaos. Divisions in Greek society are growing and Sunday's referendum may not be enough to pull the country back from the brink.

On Wednesday, after Greece -- from the viewpoint of the International Monetary Fund -- had been in default for a few hours, Alexis Tsipras was standing in the Villa Maximos in Athens, his official residence, framed by a Greek and a European flag. He spoke quietly into a TV camera, perhaps looking a little more strained than usual. The country's banks had been closed for three days, and now the Greek prime minister was trying to reassure his people by going on the attack against Europe.

Against a backdrop of leather-bound volumes, he explained why the referendum on Europe's reform plans, which he had only just presented as a possible negotiating chip, should take place after all. "Now they are fighting back," said Tsipras. "They" were blackmailing the Greeks by closing the banks, and "they" were forcing "us," the Greek people, to suffer so that "we," the Greeks, would finally submit to their demands.

"They are lying," said Tsipras. It was an odd appearance, outrageous in a Europe that perceives itself as a union. "They are telling you that this referendum is a referendum for or against the euro." In fact, he said, the opposite is the case. In fact, he said, the creditors had offered "better proposals" since he had announced the referendum. And now, he added, it is a matter of strengthening his government's negotiating position with a strong "no" from the Greek people. His voice, said Tsipras, would be even louder "if you, the people, support me."

To say that the tone has become more abrasive in this dramatic week of a seemingly endless saga of rescue and ruin is hardly an exaggeration. In northern Europe, politicians lined up in front of microphones to explain how they felt deceived by their Greek counterpart, most notably Jean-Claude Juncker. The European Commission president seemed like an exhausted grandfather who had been deeply disappointed by a beloved grandchild.

In Greece, the black-and-white approach promoted by Tsipras holds sway and differentiation has become scarce. There is a pressure to be either for or against Europe, and there is a naïve belief that every question, no matter how complicated, can be answered with a simple yes or no.

'Not Playing Any Games'

In times like these, facts have little value and the truth becomes obfuscated. On Wednesday, Greek Finance Minister Yanis Varoufakis appeared on television before a studio image of the Parthenon. Uncertainty is not good for Greece, said the host, and it is growing day by day. Varoufakis replied that it had been the plan of the "institutions," the group of creditors formerly known as the Troika - the IMF, the European Commission and the European Central Bank (ECB) - to bring Greece to precisely the position it was now in. "We are completely honest," he said, "and we are not playing any games."

The finance minister was employing the tone of a conspiracy theorist, and using the rhetoric of war. "They cannot be allowed to win," said Varoufakis. In his words, it almost sounded as if the referendum has been the Europe's idea.

It isn't surprising that the Greek government is trying to regain control of the narrative. Indeed, its place in history is now at stake.

"Ochi," meaning "no", is a heroic word in Greece, both for the left and the right. Tsipras' rejection of the agreements the Europeans were proposing was not the only reason he called upon Greek voters to vote no in his referendum. In doing so, he was also slipping into the cloak of history.

For the left, the word "Ochi!" is associated with resistance to the Greek military junta, known as the "Dictatorship of the Colonels." And in 1940, authoritarian ruler Ioannis Metaxas uttered a simple, gripping "Ochi!" in opposition to an ultimatum issued by Italian dictator Benito Mussolini. To this day, Metaxas remains an idol of the right, from the conservatives of Nea Demokratia to the neo-Nazis of Golden Dawn.

The word "Ochi" thus has an irrational power in Greece, a bit of political magic that Tsipras and his supporters are skillfully exploiting. Those who say no have an aura of heroism. "No" is a word the retiree understands, because the current situation simply cannot continue. The civil servant in Thessaloniki understands "no," because she has simply had it with the constant back-and-forth with Brussels.

Widening Rift

"The word 'no' will unite Greek society," says Syriza parliamentary spokesman Nikos Filis. Yet there is also the option of voting "yes," which means that societal division is also a likely outcome. Indeed, it is already apparent that Tsipras' referendum is creating a rift through families, companies, groups of friends, villages and cities. It is a rift that is widening every day.

A carousel of opinion polls has begun. Some predict that a no vote will prevail while others see the referendum ending in a yes vote, with the latter forecast looking more solid. On Tuesday evening, a few hours before a developed country missed an IMF loan repayment deadline for the very first time, some 20,000 people gathered in Syntagma Square to rally in favor of a "yes" vote. One sign bore the barely comprehensible message: "Yes! Don't Varou Fuck Greece." And for the first time, Syriza lawmakers in in the nearby parliament building could hear a crowd chanting for the government to: "Resign! Resign!"

On Thursday, when cash machines in downtown Athens were no longer dispensing €20 notes, and were about to run out of €10 notes, the polls indicated for the first time that a majority would vote "yes." Should that indeed come to pass, Syriza will have gambled away its negotiating position and brought about a political debacle. Tsipras has yet to be clear about his intentions, but Varoufakis has made unmistakably clear that, should "yes" win, he would resign.

There are already a few renegades within Tsipras's own camp. This week, Economy Minister Giannis Dragasakis publicly suggested that he had called upon the prime minster to accept the creditors' "final offer" and to finally come to terms with the Europeans. He later issued a weak denial, saying that he had been misunderstood. But reports that three ministers voted against the referendum make it clear that the Tsipras/Varoufakis government is losing some of its support.

Now that ATMs are almost out of cash, banks are closed and long lines of drivers fearing a gasoline shortage have formed at filling stations, everyone has begun to realize how much is at stake. A tourism association is reporting a decline in bookings. Pharmaceutical companies want to be paid in advance -- in cash -- by pharmacies and hospitals, as do the suppliers of butchers and restaurants. In the north, at the Evros River, border guards are being removed because the government can no longer afford their bonus pay. There is a growing understanding of what a national bankruptcy could mean.

Impoverishing the People

Economics Minister Dragasakis has understood it for some time. An economist educated at the London School of Economics, he has little sympathy for the zeal of the younger prime minister. Before joining the cabinet, Dragasakis called for a debt moratorium, in the realization that the country's debt load has simply become too large in the decades of mismanagement. According to the IMF's latest calculations, Greece will need €50 billion until 2018, along with comprehensive debt forgiveness. But now this confrontation course has apparently created a rift between Tsipras and Dragasakis, who was once one of the prime minister's closest allies.

There remain, though, many others who do not share his views. They couldn't care less about Europe, and they still believe that they are in the midst of negotiations. They don't follow Tsipras blindly. In fact, he often has trouble keeping them under control. But thanks to him, many are now sitting in parliamentary offices, with power, influence, a voice and perhaps even an official car.

And they want what he wants. Despina Charalampidou, 56, a petite woman with a pageboy haircut and wearing a flowered blouse, is one of them. Charalampidou is from Thessaloniki, where she raised two children, and when money was scarce, she helped out in the office of the textile workers' union, answering phones or cleaning. Now she is the deputy president of the parliament.

"We cannot accept a proposal that aims to impoverish the people," she says. She, and her party, sees the people as the Pluralis Majestatis -- and there could be no greater calamity for the party than if a majority voted "yes" on Sunday. A "yes" vote, in the party's view, is a vote against the government and against the people of Greece.

But the party's tone can become even more polemical and high-handed. Zoe Konstantopoulou is a representative of the left wing of Syriza, a very tall, 37-year-old. She is the president of the parliament. Before Tsipras offered her the prominent position, Konstantopoulou was a human rights lawyer with an interest in war crimes committed in Iraq and Serbia. She gave English lessons to prison inmates in France, but she studied at Columbia University in New York.

She very quickly managed to become perhaps the most hated woman in Greek politics, at least among Syriza's opponents. The extent of her unpopularity is impressive. She describes herself as "unyielding."

Killing Democracy

On Wednesday, Konstantopoulou gave a TV interview at precisely the same time as Tsipras was giving an interview. Tsipras appeared on the public television channel, while Konstantopoulou was interviewed on Skai, a private broadcaster. She had come to attack the station because she believed that it had been too supportive of a "yes" vote. "You glorify the rating agencies, and you are killing democracy," Konstantopoulou told the journalist, adding that a "yes" vote signified the end of Greek democracy.

It is the hour of great exaggeration and great stories in Athens. National myths are being invoked, and with a little distance, it all feels a little like a tragicomedy. Anecdotes from the 1944 civil war are being dusted off, songs of praise to the partisans who wanted to blow up the Hotel Grande Bretagne on Syntagma Square -- because it was the headquarters of the British, who had ordered their troops to shoot at Greeks -- but then changed their minds when they learned that the man who had defeated Hitler, Winston Churchill, was in the building.

The beautiful Grande Bretagne is diagonally across from the Greek parliament building, a palace where the Russian nobility found refuge from the Bolsheviks after the October Revolution in 1917. In the past few months, the grand hotel was transformed into a headquarters once again. But this time, its occupants were neither British soldiers nor Russian refugees, but young men with expensive haircuts, dressed in blazers and light trousers, who liked to spend their evenings in Alexander's Cigar Lounge. They were the special envoys of hedge funds, and the scouts sent by investor groups like Knighthead, Greylock Capital, Baupost and Fortress.

Around 2012, all of these groups bought large quantities of Greek government bonds at bargain-basement prices, and they held onto the bonds when Tsipras came into office. From their headquarters at the Grande Bretagne, they did their best to determine what was going on in the heads of Syriza politicians. They had Greek newspapers translated, talked to lawyers, advisers, journalists and embassy political analysts in an attempt to evaluate their financial positions.

A Lot of Money at Stake

"Many believed that Tsipras was like Italian Prime Minister Matteo Renzi, and that there would in fact be an agreement with the Euro Group in the end," says George Linatsas, managing director of the Axis consulting group in Athens. "Well, that has apparently turned out to be a mistake. I don't know if Tsipras has an agenda. But now it certainly looks like he does."

Up to 50 percent of the few Greek debt securities still being traded are in the portfolios of hedge funds. They have invested more than €10 billion in Greece, especially in government bonds. Even if these amounts are small compared to Greece's total debt, there is still a lot of money at stake, investments that would presumably have to be written off in the event of a Grexit. And if there is no Grexit, there will be even more money in profits. In either case, there are billions of euros on the line for the men at the Grande Bretagne.

George Linatsas has been receiving 50 or more phone calls a day since the Syriza government announced the referendum. The people calling him are not necessarily in a panic, but Europe has become all but incomprehensible to them. "I would characterize it as a certain degree of bewilderment," he says.

His clients from the financial world do not understand how a government could destroy everything it has achieved, says Linatsas. They don't understand how a government can drive its own country to ruin. Linatsas has trouble explaining it to them. "They expect daily updates. But no one knows what will happen the next day. It isn't about analyses, graphs and numbers anymore. It's about the psyche of a group and of a man."

Syriza parliamentary leader Nikos Filis, a heavyset man, is sitting in Syriza's parliamentary group office looking exhausted. "I was confident," he says, "but certain powers had a different plan." Certain powers, secret plans -- these are the kinds of terms being used in Greece today, as if enemies surrounded the country. Filis talks about how the "others" betrayed the idea of "Europe" and "democracy." It is difficult to say what exactly these words mean, coming from Filis. The chronic crisis has blurred definitions -- a crisis which, depending on one's perspective, has lasted anywhere from five to 50 years.

Shopping and Cash Machines

Democracy? "Mr. Tsipras was friends with Hugo Chavez. He names Mao as one of his role models," says Adonis Georgiadis, a younger politician with the conservatives. He is a publisher and self-promoter who was once even involved with the extreme right. He refuses to believe that Tsipras has had a change of heart. "His soul and his ideas come from the Communist Party. He doesn't fit into a liberal project like the EU."

Georgiadis and many members of Nea Demokratia, whose leader, Antonis Samaras, formed the previous administration, are convinced that Tsipras has always wanted to lead his country out of the European Union. "When he chose Varoufakis as finance minister, he must have realized that he was asking for problems in Brussels," says a lawmaker. "Why did he immediately form a coalition with the national-conservative Independent Greeks? Because it guaranteed him the support of the military."

In Athens these days, neo-Nazis are voting with the radical leftist government in parliament and investment bankers in the Hotel Grande Bretagne are talking like partisans. Ilias Panagiotaris is a member of parliament for the right-wing extremist Golden Dawn Party, whose logo resembles a swastika. In the vote on the referendum, Golden Dawn voted with the Syriza government.

Panagiotaris justifies the vote by claiming that his party's "no" is not the same as Syriza's. Golden Dawn's "no", he says, is the "no" after which "people go into battle with a smile on their faces." Tsipras and his people, says Panagiotaris, have not actually earned this proud "no." The Greek people have gone to rack and run, says the populist politician. They say "no" with their lips, he says, "but deep inside, they just want to go on shopping and have their cash machines. Just wait," says Panagiotaris, "these Greeks will vote "yes," at 65 to 80 percent."

The referendum on Sunday will be the seventh in recent Greek history. Most of the past referendums have been about whether the Greeks wanted a king. Sunday's referendum is about the country's relationship with the rest of Europe and to global financial markets. But it is also about whether they want to be seen as a respected country that lives up to its agreements.

No Longer Divided into Right and Left

The Syriza administration minister, Giorgos Katrougalos, who is organizing the referendum, says that he is having trouble coming up with the nine million envelopes he needs. At a cost of €25 million, the referendum isn't cheap, either, he adds. The military will transport the ballots to remote areas with ships and helicopters.

On Tuesday evening, as lawmakers were leaving the parliament building, Nikolaos Panagiotopoulos, a member of parliament with Nea Demokratia, was on his way to his home district, Kavala, with his last €50 note in his wallet. The Greek government headed by Syriza has made every possible mistake, even those previously made by his own party, he says. He understands why people are no longer listening. "Those whose pensions are being cut will say 'no,' ochi."

But he is afraid that the country will become even more divided, and not along the old lines left over from the civil war. "Greece is no longer divided into left and right. Those days are gone. There is the faction of the open-minded, who have traveled, can speak foreign languages, have a good education, are interested in Europe and are no longer willing to put up with everything being about connections. No matter what it is, you constantly have to get past countless desks to get anything done."

Panagiotopoulos arrives at Syntagma Square just as the proponents of a "no" vote have gathered. OCHI, OCHI, OCHI is spray-painted onto blocks of stone -- in red, to make it easier to read. Syriza supporters are holding up their flags, especially the one with the hammer and sickle, hoping to instill fear in the hearts of the rich people inside the Grande Bretagne.

'Much More at Stake'

But the representatives of global and financial markets, the hedge fund envoys, are not that easily intimidated. They gather and analyze information, and then they decide where to pull out their money and where to invest it. One of them, a Greek, says that money is no longer the issue. "There is much more at stake. Everything, actually."

Tsipras is a liar, a manipulator and an imposter, says the man, and Europe has wasted too much time placing its trust in him. "We need to make it clear to our Greek brothers that this is about everything this continent has achieved in 60 years. I want my children to be able to grow up in Greece," he says. "We have to overthrow this government, and we only have until Saturday to do it."

Revolution was not in the air at 1 a.m. Greek time on Wednesday, midnight in Brussels, when Greece defaulted, according to the IMF's logic. Instead, the square was quiet and peaceful. Garbage men were sweeping up the trash left behind by the demonstrators, and two members of an honor guard, in their pleated, skirt-like uniforms, knee tassels and decorative pom-poms on the shoes, were holding the fort. They stood next to their sentry box at the tomb of the unknown soldier, in front of the floodlit façade of the Greek parliament.

At precisely the moment when the creditors' deadline expired, the tall men suddenly became visibly more relaxed. Like dancers in a mechanical ballet, they stretched their legs and limbs, moving in slow motion as if by remote control. It was the changing of the guard.

Translated from the German by Christopher Sultan


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