Analysis: Even in defeat, Greece sends powerful message to Europe

Darrell Delamaide | Special for USA TODAY

WASHINGTON — The deal agreed to Monday between Greece and its creditors was hard fought, and even if Athens did not come out on top, the lengthy negotiations call to mind another Greek battle: the Battle of Marathon, a famous Greek victory against Persian invaders in 490 B.C. that later inspired the marathon run.

After hours of intense negotiations, Greek Prime Minister Alexis Tsipras accepted terms for a third bailout that were far more onerous than those in the second bailout program, which expired June 30 after Greece rejected further austerity.

What lies ahead is more uncertainty and turmoil as Tsipras must now push a number of these new policies, including tax hikes and pension reform, through a parliament in which he maintains a fragile majority.

The harshness of the terms and the intransigence of core eurozone creditors, led by Germany, astonished many economists and observers worldwide. The Nobel Prize-winning economist Paul Krugman called it "vindictive folly" and suggested it might be a fatal blow against European integration.

Although many thought Tsipras had a secret agenda to lead Greece out of the euro, he remained faithful to his pledge — and the will of the majority of Greek voters — to stay with the joint currency.

In fact, it seemed that that particular objective was German Chancellor Angela Merkel's and Finance Minister Wolfgang Schäuble's, with former Greek finance minister Yanis Varoufakis attributing it to Schäuble as a way of enforcing discipline among other euro members.

In the end, it was Tsipras who reneged on the other half of the pledge that got him elected: that Greece would not accept a bailout "at any cost."

Faced with the chaos of a collapsing economy and failing banks, which forced Greeks to scramble for food and risk running out of essential medicine, Tsipras ended up accepting austerity terms Greek voters had decisively rejected in a referendum last week.

It was Merkel who remained firm in her declared objective to keep Greece in the euro but not "at any cost."

So is Merkel the winner and Tsipras the loser?

It depends on what time frame you look at. In the very short term, Merkel has clearly won this battle.

But in the longer term — can we now call it a war? — this "victory" could produce a political backlash throughout Europe, with fateful consequences for the future of "ever-closer union" in the eurozone and European Union, a 28-nation political bloc.

Germany has made it clear that Europe will operate strictly on terms set in Berlin and Frankfurt. Voters in France, Spain, Italy and other eurozone countries have to decide if that's the future they want for their countries.

Even many voters in Germany have grown uncomfortable with Merkel's display of naked power after she submitted another freely elected European leader to what one eurozone official at Sunday night's negotiations termed, according to The Guardian, "extensive mental waterboarding."

Tsipras, who had said that eurozone leaders were bluffing about further austerity measures, faces a monumental challenge in getting the new measures approved by the Greek parliament this week and may have to cede or share power through new elections or a government of national unity involving all major parties.

Many Greeks are now asking whether the six months of the Tsipras government defying the creditors were worth it.

But no one questions the value of the valiant defense put up by Sparta's King Leonidas and his small band of warriors against a vastly larger Persian army at Thermopylae in 480 B.C.

All the Greek warriors were killed and the lost battle enabled the Persians to take Athens. But the courageous effort rallied all the Greek states and ultimately the Persians withdrew without ever conquering Greece.

Tsipras, to maintain the dignity of Greece's citizens, took a stand against a narrow, neo-liberal view of how economies work.

Even in defeat, he has sent a resounding message that Europeans throughout the continent have heard.

USA TODAY columnist Darrell Delamaide has reported on business and economics from New York, Paris, Berlin and Washington for news outlets that include Dow Jonesnews service, Barron's, Institutional Investor and Bloomberg News service.