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Challenges in Multi-Stakeholder Debates

Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability. Read the previous post here.

We have focused our discussion over the past few months to argue for, and establish, the need for a common space where burning societal issues can be resolved among concerned stakeholders. We looked at positive and negative implications, dangers and opportunities.

The back and forth between Kathy Miller who lives in North America, and me in Europe has stopped for a couple of months. This is unusual and a first in our 18 months continued conversation on this blog. It got stuck on my end. I have not been able to write. A couple of things occurred in parallel: first of all, I was absorbed in a complex multi-stakeholder process here at BSL that broadly discussed a potential new governance structure for the school. Secondly, Europe has been paralyzed by the Greek economic situation and the ongoing negotiations with Brussels that read and felt like a thriller, an ongoing thriller. Somehow, I lost my voice in all of this. This blog is an effort to regain my voice and to attempt a hesitant path on uncharted territory (German: “Neuland” or “new land”). I’ll do this looking at the Greek situation.

Until recent years, anybody in Europe who heard “Greece” immediately associated the word with turquoise sea, blue sky and white stone houses. With perfect white or volcanic black beaches, sailing boats, wine that can only be drunk in Greece (if you bring ‘Retsina’ back home, it strangely loses its charm), easy moment of lazy vacations spent on a sailing boat or on one of the many islands.

Dreamy smiles erupted spontaneously. Now, my partner’s daughter announced she’ll go to Greece on vacation on Sunday, and we are worried she might be robbed of all the cash she’ll have to bring along, since the banks are still closed after three weeks, and what situations she will encounter, as demonstrations have turned violent after the Greek parliament agreed to new EU bailout conditions.

Greece has taken Europe by storm in the past month – this is unlike anything the EU has experienced since its foundation. Widely divergent positions have emerged and have created the basis for a significant abyss of beliefs, understanding and perspective among political parties and nationalities, – people vs. their elected representatives in just about every country in Europe. Even Switzerland, not formally a part of Europe, is caught in the middle with the media spending much of its time reporting breaking news from the Eurozone. We are experiencing an unusually hot summer resulting in many more barbecues and long evenings around large tables close to the lake drinking rosé and talking. I have a feeling that nobody truly understands what is going on. We can hardly follow the events; much less understand the causes, meanings. Not to talk about unintended consequences and sensible strategies ahead.

Let us consider the negotiation blunder of Greek’s President Tsipras, who – from what I can tell – has been so unfortunate and unskilled in his discussions with Europe, that the Greek people are ending up paying a very steep price for the discontinued Financial Aid package in June and the attempt of remaining within the Eurozone and receiving a third Financial Aid package.

President Tsipras has taken over negotiations for Greece with the EU at the beginning of 2015. His (delay) tactics created quite some frustration in the process. When he finally walked away from the last EU proposal to continue with a second aid package, most of his European counterparts were stunned in disbelief. Did he really want to exit Europe, the Euro, did he understand what it means to walk away, shutting down Greek banks and the economy? He returned home and set up a referendum for the Greek people to vote for or against the last package he had refused. His recommendation to his people: reject it. Europe was flooded with tragic reports of the daily frustration and desperation of the Greek people: closed bank accounts, running out of medicine, economic slow-down, tourists staying away. For that week before the referendum, there was a sense of a great tension between the political establishment which stopped the aid payments when the negotiation deadline expired and the European people (citizens) feeling united and being very empathic towards their Greek brothers and sisters. Was the entire democratic system put in question? Did the people and their political representatives diverge? The Greek people voted OXI (NO) in their referendum, agreeing with Tsipras, basically saying, at this cost, we don’t want to remain within the Eurozone. Then Tsipras announced he would achieve a support aid agreement with the EU in a maximum of 48 hours. Europe stopped to hear what he would have to say in Brussels, and was stunned to learn that he had nothing to say, nor had he prepared a proposal or request. Was he kidding? How can you expect to gain anything if you don’t ask for something? His colleagues gave him 48 hours to develop a proposal. He used to time to not only that but to unite the entire Greek parliament behind him and obtaining a mandate to negotiate on their behalf. Strangely, he suggested to the EU pretty much what the EU has last proposed to him, which provoked him to leave the negotiation table in the first place and had plunged Greece into an unimaginable economic crisis.

From a negotiation perspective, his strategy is incomprehensible. He turns down a proposal and unites the people behind him agreeing to reject the proposal, only to then turn around and unite the parliament behind him suggesting terms and conditions that are eerily similar with proposal he had previously turned down. The finance minister and the prime ministers across Europe must have rubbed their eyes in disbelief. The only way to justify such a shift was the assumption that he had visibly crossed his fingers behind his back, clearly visible to the Greek people, that he had no intention to ever honoring the deal. The trust was broken and things went haywire from there on. After a marathon negotiation meeting lasting an entire weekend, the final terms Tsipras agreed with were considerably worse than the ones he had initially walked away from. He returned to Greece with a deal that could not have been further from what he had promised and wanted. And he had three days to pass significant legislative changes through the parliament, terms that were thought impossible to accept. He managed, mostly with the opposition party and a third of his own party voting against him. When the Greek people heard this, they had two reactions: relief and hope that the banks would open soon again, and anger. Anger that their vote was irrelevant, that the deal was castrating, and disbelief and distrust in their government.

And we are not yet done. Given that the second aid package expired, this new deal now needs to be passed through all 18 parliaments of the Eurozone countries – and it is quite unclear how this will go, the signs are good, but time is pressing with the Greek banks still closed.

So, looking back, how can one person (Tsipras) have caused so much damage as a result of a total negotiation blunder? I dare say that if he had approached the EU on Tuesday after the Greek referendum (where he showed up empty-handed) and had asked, with the full support of his people, for much better conditions than had been previously offered to him, the negotiations might have ended up somewhere in the range of where the original proposal was (my speculation as a negotiation expert). Coming back proposing the same he had previously rejected showed such weakness and resulted in such a loss of credibility that the EU couldn’t make sense of it and interpreted it as needing to be much more demanding in its final offer to ensure that at least something changes in Greece.

Or in the sandbox language: Tsipras wants to play with the toy of Hollande-Merkel, for this they ask him to eat some sand. He refuses and says his parents would never agree for him to do so. He goes home, asks his parents, parents say no. He returns to sandbox and just sits there. Hollande-Merkel who knows that parents said no to sand-eating, ask: “do you still want to play with our toy? If so, tell us what you will offer for it.” Tsipras goes home and comes back having talked to all his siblings. He says to Hollande-Merkel: “I want to play with the toy and I am ok to eat most of the sand, but will do so over time.” Hollande-Merkel think: but his parents told him not to eat sand, what is going on? They talk to their buddies and eventually tell him that, yes, he can play with a new toy for quite a while but he will need to eat sand, take off his clothes, cut off his hair, pledge his hair and his clothes and have his siblings agree that their family will do all kinds of things they don’t want to do, or else he won’t get his clothes back. He goes home (with his clothes still on presumably, not sure about the hair) and convinces everybody that this is a great deal. His parents are furious! Meanwhile Hollande is mad at Merkel who has pushed things too far he thinks, and their buddies are divided into two camps as well. How will the Greek family dining on sand for a long time do?

PS I am not implying that all of this is only Tsipras fault. Some argue there should have never been a sandbox, others say there should be an age-limit for those playing in there, and some recent feedback from parents reunions claim the parents should better supervise those playing in it…

So what am I saying? I am claiming that with better negotiation skills, this story could have ended very differently. I am not convinced by the way that Tsipras should really want to continue playing with the toy. Maybe it would be better for him and his family to build their own toy, but that is another story! I am also saying that Greece and Europe are a bit more important than kindergarten and have far-reaching regional if not global consequences. We are talking about hugely important stuff here – how can this go so wrong? What I hope I have managed to convey here is the sad outcome of a multi-stakeholder “common space” (the sandbox) that has very possibly ended with the lowest possible outcome. If such a thing happened elsewhere, we would conclude that such a common space needs to be better facilitated and actions needed to be guided by a common vision that is in the best interest of everybody. I wonder whether political discussion should in future be positioned in such a light, thus deserving professional facilitation and process guidance, rather than the political power play that some master better than others and can end up with results that are not only disappointing but possibly really damaging in terms of related unintended consequences. I may of course be wrong! Kathy, what are your thoughts?

Author: Katrin Muff PhD

Dr. Katrin Muff is Director of the Institute for Business Sustainability in Lucerne, Switzerland and Professor of Practice at the LUISS Business School in Rome, Italy. She consults leaders and boards in business sustainability and strategic transformation, and runs an executive program together with Thomas Dyllick. Her book “Five Superpowers for Co-creators” provides insights about issue-centered multi-stakeholder processes. She brings 20 years of international strategic and general management experience in Europe, Australia, North America and Russia and a decade of leadership in business education. www.KatrinMuff.com

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