from Peter Radford
Well so much for that.
Where do I begin?
The so-called deal announced yesterday achieves none of its objectives. The written objectives that is. The unwritten ones we will get to in a moment.
There is no doubt in my mind that the Greek economy suffers from a surfeit of inefficiencies. It cannot sustain the social edifice erected on top of it without ridding itself of the multitude of privileges that various groups have accumulated for themselves through time. Greek government has been, for many years, a source of patronage and protection of a slew of inside deals that wreak havoc on those – the majority – on the outside.
I am sure this systemic problem must irk everyone living further north.
Clearing out those problems now is not the priority. Saving Greece is. Saving Greek democracy. Saving those who have no access to the myriad schemes and deals that enrich the minority.
That was what I understood the left wing governing party to stand for.
What I did not understand that the Greek government apparently had no viable plan ‘B’. It made no serious effort to put an plan for an exit form the Euro. It had no idea of how to execute the issuance of an alternative currency.
Or so it seems.
So the Greek government entered this fight without heavy weaponry. It was bound to fail. It had to capitulate.
And what a capitulation it was. Yanks Varoufakis is calling it a new Treaty of Versailles. From what I can see, he is right. The deal is a disaster for Greece. It assures the destruction of whatever is left of the Greek economy. It will prolong, for many years if not decades, the stagnation and steady decline that has set in since austerity was forced on it. It will stir up political and social unrest. It will push the Greeks into a marginal and subjugated existence at the whim of technocrats and politicians who, apparently, used last weeks referendum result as a reason to execute what amounts to a coup. They have seized control of the financial operation of a sovereign nation.
To avoid a hair cut on the outstanding debt. A haircut that still seems inevitable.
Now for those unwritten objectives.
Sometime this weekend this became an exercise in punishment, in the extraction of reparations, and in the public humiliation of a democratically elected leader. This deal cannot have been about anything economic: it is manifestly a grossly foolish and viciously constructed error if it is. The Greek economy will not thrive under the boot of the Troika. This deal is not intended to resuscitate the Greek economy, it is intended to make an example of it.
The deal is, in effect, a demonstration of raw power. A kind of scorched earth, burn-down-the-villages, and round-up-the-citizens exercise designed to teach a lesson. It is a return to the pre-European Union realpolitik that so ruptured and ruined the continent in the early twentieth century.
It is an embarrassment and a humiliation for the Greeks, but more so for Germany and it enablers. The Germans have cast themselves backwards morally, they have stripped away all pretense and revealed an ugly truth about themselves: they see no “union” in the Eurozone, they see no equality, and they brook no democracy.
For months now Merkel and her aides have talked about their lack of “trust” in the efforts being made by the Greeks. Now the worm has turned. It is Germany whose intentions, motives, and words engender no trust. From the deliberate leak of German documents to the vicious behind the scenes campaign to eject Greece entirely from the Euro, no one can doubt that this was an exercise in old fashioned power politics.
Someone needs to write a new version of “The economic Consequences of the Peace”.
Europe is no longer a stable union, it is fractured and exposed as undemocratic. Greece is a virtual dominion living under constant threat with its assets pawned so as to save foreign banks.
This is a very bad day indeed.