NO ‘SAFEGUARDS’
Tsipras spouting dangerous nonsense. Corcoran,
Among the many words of dangerous nonsense disseminated by Greek Prime Minister Alexis Tsipras over the course of his country’s six-month voyage of economic doom, these stand out: “The deposits of citizens in the Greek banks are completely safeguarded.” No wonder the run on Greek banks escalated, forcing the closing of the nation’s financial institutions for the week.
A large proportion of Greek citizens would know that there is nobody to safeguard the euros on deposit at Greek banks, especially not Tsipras, a national leader who over the weekend abdicated responsibility as leader of the government by announcing an instant referendum on the future of the country.
As if to say: I have no courage to lead this country, no personal strength to bear the burden of the complicated economic and policy decisions needed to rescue Greece from chaos. It is not my responsibility. Instead, I will turn the decision over to a referendum. Let the people decide, and if they are wrong, it will be their fault, not mine.
The paranoid atmosphere surrounding the July 5 referendum, created by Tsipras, would have Greeks believe that their country is the victim of blackmail and injustice.
Tsipras would have them believe that Greece is a holy socialist democratic state that is being bullied into submission — asphyxiated, he said — by authoritarian forces who want to impose “harsh austerity” on the people of Greece.
The referendum question itself is a blob of incomprehensible technical language: “Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled ‘Reforms for the completion of the Current Program and Beyond’ and the second ‘ Preliminary Debt sustainability Analysis.’ “
Will the future of Greece actually be determined by a “Yes” or “No” vote to such a clutter of eurojargon?
Tsipras describes the referendum as merely an exercise in democracy. “Greece is, and will remain, an integral part of Europe, and Europe an integral part of Greece,” he said in a 1 a.m. speech in Athens last Saturday. On Monday, he again portrayed the referendum vote as merely a negotiating ploy. “I expect (European officials) to respect this democratic process, not to kill democracy in its birthplace.”
Can he pull off this dangerous play? He is taking Greece to the brink of exit from Europe while claiming to be merely engaging in elaborate negotiations.
The Wall Street Journal editorial Monday was topped by an appropriate headline: “Greek Suicide Watch.” Will the Greeks vote to expel themselves from Europe? A default on a small portion of the massive 280 billion euro debt in coming days and weeks could trigger an exit from the euro, but the referendum appears to buy Tsipras a little more time.
There are some who say the “Yes” side could win, in which case Tsipras would likely be ousted from office and more sensible leaders with greater courage and more honourable tactics could emerge to save Greece from itself, and rescue the country from the leftist political class that swept into power with Tsipras in January. Aristides Hatsis, an associate professor of law and economics at the University of Athens, wrote on his blog Sunday Tsipras heads a party that is a “coalition of radicals, Maoists, former Stalinists and populists. Their gut feelings are anti-European and anti-western.”
Encouraged by ivory tower academics on the left, such as Joseph Stiglitz and Paul Krugman, Tsipras is forcing the Greek people to make a decision that could lead to the country’s exit from the eurozone and the possible adoption of a new Greek drachma as the country’s official currency.
There is no doubt that the rest of Europe’s nations, along with the International Monetary Fund and other official financial institutions, helped create the fiscal mess that is Greece. But Greeks cannot pretend that they bear no responsibility for a decade of unaffordable welfare-statism, corruption, tax evasion, and borrowing excess were forced on them by outsiders.
For those who favour a Greek exit, with a new drachma to replace the euro, a little economic history is in order. Greece adopted the drachma during the Second World War; it was devalued in 1944 by 50 billion to one. Fewer than 10 years later, Greece joined Bretton Woods after another devaluation of 1,000 to one. From 1953 to 1973, the drachma was fixed to the U.S. dollar. During that time, sometimes dubbed the Greek Economic Miracle, the economy grew by seven per cent a year on average and the economy boomed. After 1973, the drachma floated downward until the country converted to the euro in 2002, after another devaluation of 400 to one.
It’s a history worth remembering when Tsipras says bank deposits in Greek banks are safeguarded.