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7 July 2015

What Are the Geostrategic Implications of a Grexit?

BY JAMES STAVRIDIS
JULY 1, 2015

A spurned Greece could become a nightmare for the EU and NATO.

At the moment, it is unclear how Greece will ultimately fare in the current duel of wills with the Troika over its technical default, the upcoming referendum, and the possibility of a continuation of the long-running bailout drama. The two sides are locked in acrimonious finger-pointing, Greek banks are shuttered for the week, and the logical but ever elusive diplomatic and economic solution — a reasonable negotiation between the parties — seems further away than ever. As a proud Greek-American, I am saddened by the situation.

Meanwhile, the July 5 referendum is judged too close to call at the moment, and most Greeks will likely be confused about the implications and uncertain how to vote. Macroeconomic theory appears to have been the first casualty of the process, and the doomsday economic scenarios — a crashed Greek economy, a battered if not broken euro, and a deeply shaken European project — are looming large on the horizon.

But in the midst of all of the appropriate Sturm und Drang of the Greek financial and economic crisis, it is worth considering the geostrategic implications of the “Grexit” — which have been largely ignored.

Let’s face it: A Greece that goes crashing out of the eurozone will be an angry, disaffected, and battered nation — but one that will continue to hold membership in the European Union and NATO, both consensus-driven organizations. (“Consensus-driven” means that without unanimous consent among all members, the organization cannot take decisions or execute effective operational actions.) Many times in NATO councils as the supreme allied commander I watched the agonizing process of building consensus, one compromise at a time. In both the EU and NATO, an uncooperative Greece in the future could time and time again put the organizations “in irons,” which is to say becalmed and not moving effectively forward.

This could manifest itself very quickly in, for example, decisions about sanctions against Russia (from which Greece is avidly courting support and funding, logically enough). It could easily affect day-to-day governance in the European Union over issues from negotiating the Transatlantic Trade and Investment Partnership to agricultural subsidies to what should be done about refugee flows across the Mediterranean. Greece could become a troublesome and obstructionist actor in complex negotiations involving the EU, such as the Iranian nuclear treaty efforts.

In addition to a potentially difficult and badly distracted Greece in the counsels of Europe, a Greek default and crash out of the eurozone will almost certainly continue the downward spiral of the Greek economy. This will have knock-on security effects in how much the Greeks are willing or able to participate in NATO operations, EU missions, humanitarian projects, refugee rescues, and many other security-oriented efforts. Access to Greek bases — many in geopolitically important locations, like Souda Bay, Crete — could conceivably be affected. It is worth remembering the significant and important geographic position of Greece on the maritime flank of NATO during a time of great tension in the eastern Mediterranean.

Indeed, a Greece that is spurned by Europe is a nation that will inevitably begin to look elsewhere for support and engagement. A very likely prospective partner of course would be Russia. Many Greeks are quite sympathetic to Russia, a fellow Orthodox nation, particularly over the situation in Ukraine.Many Greeks are quite sympathetic to Russia, a fellow Orthodox nation, particularly over the situation in Ukraine. If Moscow were to assist Athens economically, even marginally, this would further distance Greece from Western Europe. Another likely friend and partner would be Serbia, which has its own troubles with various EU Balkan members. Ultimately, it is not impossible to contemplate Greece departing the European Union or even NATO. Some voices on the far left in Greece are already advocating this course of action.

Finally, a Greece that is angry and increasingly untethered from the traditional European organizations could become more suspicious and difficult in its immediate locale. Without strong and enthusiastic membership in NATO, the relationship with Turkey looks very different from Athens, as do Greek perceptions of the Balkans. If Greece does not have the EU and NATO “at its back,” it will be far less secure in how it approaches Turkey, an old enemy and the source of much conspiracy. That is fundamentally destabilizing.

So, will Greece leave the EU or NATO if it drops out of the eurozone? It’s highly unlikely; cooler heads will probably prevail. But it is not impossible as the crisis deepens and emotions flare on both sides. And at a minimum, a stormy and contentious time lies ahead unless a compromise can be fashioned. What should be done?

For one, this can’t be left to the central bankers. They are not politicians and aren’t paid to be sensitive to the geostrategic and political implications of a Greek default and departure from the eurozone. At the dark end of the spectrum, losing any nation from the EU or NATO is simply terra incognita and would shake both organizations in fundamental ways while deeply weakening the idea of the European project generally.

As the Troika conducts further negotiations, it needs to consider the value that Greece brings by virtue of its membership in the EU and NATO. The Greek negotiators have been making these points, but many on the European side tend to ignore them and focus only on the economic side — a natural impulse, but not the kind of 360-degree view necessary to fully assess choices under stress and pressure.

From the other side of the table, the Greeks should likewise think in geostrategic terms as well as economically about the choices ahead. Sovereign nations get to make sovereign decisions about their future. Despite all the emotion about the terms on offer, part of the package is a continued membership card in the European organizations that have played a fundamental role in Greece’s place in the post-World War II order. The other choices — joining Russia’s Eurasian Union or simply becoming nonaligned — are not good options.

These are not easy choices on either side, but some hope remains that a compromise can be negotiated. There is fundamental value to Europe in having Greece as part of its orbit; and equally Greeks should see the value in being part of the transatlantic world. There are big strategic stakes at play, and there is more to the business of the bailout than just business.

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