Yanis Varoufakis, the newly departed but mostly un-missed Greek finance minister, has a way with a metaphor. This is what finally did him in. After likening the austerity measures creditors imposed on Greece to "fiscal waterboarding," he crossed a line – even by the rather lax standards of his boss, Prime Minster Alexis Tsipras – by accusing Europe's leaders of "terrorism" last week.
Still, Mr. Varoufakis articulated perhaps better than anyone the fundamental clash of paradigms at the root of the Greek impasse. Since the election of a radical left Syriza government this year, the clash has no longer really been over the terms of the country's bailouts – despite appearances to the contrary – but about the sanctity of capitalism itself and the political institutions that sustain it.
In one of his more useful metaphors, Mr. Varoufakis has compared the options facing German Chancellor Angela Merkel, Europe's de facto decider, to a "red button" and a "yellow button." Pressing the red button would effectively forgive most of Greece's debt and that of other bailed out euro zone countries, allowing the entire continent to start afresh on a path to growth.
Pushing the yellow button would mean "the euro crisis continues to bubble along, albeit in a controlled fashion." The euro zone would survive, but weaker European countries would fall into a deflationary spiral with sliding incomes and populations. Greece, Ireland and Portugal "shall become little Latvias, or indeed Kosovos: devastated lands … on which [Europeans] will holiday and buy cheap real estate."
The red button is clearly the better option for all. But Ms. Merkel keeps opting for the yellow one, in Mr. Varoufakis's view, out of a "radical misunderstanding of what kept the euro zone healthy" before 2008. While northern Europeans such as Ms. Merkel blame "spendthrift southerners" for the debt crisis, Mr. Varoufakis blames what he calls, in his book of the same name, the Global Minotaur, or "the system of neoliberal capitalism centred on Wall Street, extracting tribute from the world."
Ms. Merkel has allowed the crisis to bubble along, insisting on austerity measures and Greece remaining in the euro zone, in part to placate a German public that sees itself as more hard-working and thrifty than the "fiscal profligates" of southern Europe. She has also resisted the more radical option favoured by German Finance Minister Wolfgang Schaeuble of pushing Greece out of the euro zone altogether, an admission of the euro's failure the Chancellor does not want to make on her watch.
But even if Ms. Merkel had been open to the red button, granting debt relief to Greece before, Syriza's election and the threat from similar left-wing populist movements in other European countries, ironically, have made it harder for her to consider that option now. Debt forgiveness for Greece would empower the radical left in other bailed out countries that have gone along with austerity, an outcome that could destabilize Europe and Ms. Merkel's place in it more than any Grexit.
Spain, Italy, Ireland and Portugal all have insurgent left-wing populist parties challenging the moderates in power. Giving in to Syriza's demand for debt relief would especially vindicate Spain's Podemos, which argues there is an alternative to the tyranny of the capitalist apologists in Berlin and Brussels. It would also likely amount to signing the death notice of Prime Minister Mariano Rajoy's centre-right government, which must face voters before year-end.
The new leaders of Europe's radical left, such as Mr. Tsipras and Podemos's Pablo Iglesias, are cut from different cloth than most politicians. They are true radicals. They want to re-establish the basis of the European Union as a socialist project with redistribution of wealth at its core. In short, they are unapologetic anti-capitalists out to upend the very model of Europe that ensures Ms. Merkel's dominance.
"Ordoliberalism – state-protected capitalism – has placed a noose around the neck of Europe's people, especially those of the South and East, who joined the [EU] recently" Mr. Iglesias said in April. Austerity, he added "has shot to pieces the idea of the union as a sanctuary of the social rights-based democracy that was enshrined in postwar constitutions."
On Wednesday, Mr. Varoufakis's replacement as finance minister, the more understated but no less doctrinaire Euclid Tsakalotos, submitted a request for new loans and debt relief. Mr. Tsipras told the European Parliament he wanted "a socially just and economically viable" deal.
But their radical politics are only making it harder for Ms. Merkel to push the red button.
Konrad Yakabuski