It was a marathon even by the European Union’s standards. For hours, leaders of countries in the eurozone argued, haggled and shouted at each other. After breaks for refreshment, they argued, haggled and shouted some more. Rumours swirled around the packed media room. Eventually, as Brussels was waking to a new morning, the 17-hour overnight summit staggered to an end.
All participants were in agreement that victory had been snatched from the jaws of defeat. Despite the brinkmanship, a deal was eventually done – as seasoned EU watchers had always said it would be, even when all hope seemed lost.
This is not a bit of crystal ball gazing before Boris Johnson’s dinner with the European commission president, Ursula von der Leyen, but a recap of how Grexit – Greece’s departure from the eurozone – was averted in July 2015.
For veteran EU watchers, the Brexit trade row looks uncannily like the clash between Athens and Brussels five years ago, which also involved a referendum where EU terms and conditions were rejected.
The stage is the same, some of the dramatis personae – most notably Germany’s Angela Merkel – are still cast members, and the script has followed a familiar pattern: endless talks going nowhere leading up to a make-or-break meeting at which both sides have to decide whether they want to do a deal.
Johnson is not the first politician with a mandate to take on the EU. Back in January 2015, Alexis Tsipras became prime minister of Greece after the country had endured half a decade of misery. Its economy had contracted by a quarter, one in two young people were out of work, and the country was only able to pay its debtors courtesy of financial support from the EU, the European Central Bank and the International Monetary Fund, which came with harsh strings attached.
Tsipras called this “bailout barbarity”. His equally charismatic finance minister, Yanis Varoufakis, said that having won an election on an anti-austerity platform, democracy should be respected and the bailout terms eased.
Other EU countries, most notably Germany, disagreed, and the negotiations went nowhere fast. For months, meetings of eurozone finance ministers were dominated by the crisis, with one blowing up spectacularly in February when Varoufakis rejected Europe’s proposals, before a four-month sticking-plaster bailout extension was patched together.
On 26 June, Tsipras said he would hold a referendum on the bailout terms being offered by the EU. Two days later, Athens was forced to impose capital controls after the ECB refused to increase its support for Greek banks.
On 5 July the referendum rejected the terms of the new EU loan and, by decisively saying no to another dose of austerity, set the scene for a crisis summit the following weekend at which Greece’s future as a eurozone member would be decided.
Tsipras was subjected to what EU insiders called “extensive mental waterboarding”. Greece would stay in the eurozone and get a new bailout, but only after agreeing to reform the tax and pension system, to liberalise the labour market and deregulate other parts of the economy. The terms were even tougher than those on offer before the referendum.
It was clear who had come off worst. “They crucified Tsipras in there,” said one senior eurozone official who attended the summit, according to the Financial Times. “Crucified.”
So will history repeat itself? While there are similarities between Grexit talks in 2015 and Brexit talks in 2020, there are also important differences.
For a start, those gathered round the table on that July weekend knew Tsipras had no real intention of taking Greece out of the single currency. Indeed, he had signalled as much between the result of the referendum and the Brussels summit by replacing Varoufakis with the more emollient Euclid Tsakalotos.
Varoufakis promptly called the deal “a new Versailles treaty”, comparing it to the 1967 Greek coup d’état but using banks, not tanks. And there were clashes, teargas and molotov cocktails on the streets of Athens that week as MPs voted the unpopular measures through.
All things considered, Johnson would rather secure a trade deal than not, but trading with the EU on World Trade Organization terms would not be so nearly as momentous for the UK as leaving the euro would have been for Greece. The choice is no deal or a relatively thin deal.
Finally, it is worth noting that trade talks do not always end with countries stepping back from the brink. Sometimes – as was the case for the World Trade Organization in Seattle in 1999 and in Cancún in 2003 – they fail.