Greece’s soap opera about to turn tragic
Things are about to get ugly in Greece, as the banks stay shut, ATM withdrawals are further restricted, and people everywhere stop paying their bills and conserve euros to buy food.
Is this a tragedy, a soap opera, or both? The essence of tragedy is that a fatal flaw in the protagonist is played out to its inexorable grim conclusion, but the essence of soap opera is that you have to keep the plot going. And what if the consequences of your own tragic ideological flaws fall on others?
If the protagonist is allowed to keep putting off the evil day, he is inevitably tempted to push the theatrical envelope, which is exactly what Prime Minister Alexis Tsipras did with Sunday’s referendum.
Greece’s “No” vote to the latest proposal from the European Union, the European Central Bank and the International Monetary Fund — who increasingly appear more like the Three Stooges than an all-powerful “Troika” — is, appropriately, causing much sturm und drang.
It has led to a frenzy of eurocratic toing and froing as various leaders and institutions earnestly consult on “next steps.” German Chancellor Angela Merkel met with French President Francois Hollande on Monday, and called for a meeting on Tuesday of eurozone leaders.
Greek Finance Minister Yanis Varoufakis has been thrown under the donkey cart, to be replaced by a man named Euclid, but does anybody believe that a new proposal to be put forward by Tsipras will bear any trace of logic, geometric or otherwise?
On Sunday, after the result was announced, Tsipras declared that his mandate was “not to rupture Europe,” but to boost “our negotiating strength for reaching a sustainable deal.” But nothing could be less tenable than Tsipras’ promise that Greeks can have their euro and abuse it too.
Another pertinent question is whether you could trust any Greek government to keep to the terms of an agreement. They can always start invoking “dignity” and “blackmail” again when the time seems right.
One frequently posed question is how one tiny country can cause so much trouble. The answer is that Greece isn’t so much the canary in the coal mine as the whiff of poison gas that points to much larger toxic ramification. And it knows it. Greece stands for the fatal flaw of the socialization of risk, and highlights the reckless shortcuts taken by eurocrats eager to install their megastate.
The other big questions going into the next episode of
Greece stands for the fatal flaw
of the socialization of risk
Debts of Our Lives include: whether Tsipras is willing to come up with a proposal that at least allows the eurocrats and the IMF to keep talking; or whether the country will be forced to exit the eurozone, and possible the EU, a possibility that the one-way ratchet of socialist global governance never countenanced.
Tsipras is acutely aware that if he is forced out of the eurozone, he takes the European dream/fantasy of benign social democracy with him. Analysts suggest that a Grexit might lead to “contagion,” in that Spain, Italy and Portugal might decide to walk too. But the answer to that threat is simple: let Greece go and see what happens to it. Pour encourager les autres.
Meanwhile it’s an open question whether Grexit might strengthen the eurozone, or merely represent an unpaperable crack in a fundamentally unworkable system. Europe is not a “natural” currency union area, and the EU is more fundamentally based on a socialist ideal of shared irresponsibility.
In the good old/bad old pre euro days, Tsipras would now have been placing large order with currency printers, appointing a suitable patsy to head the state bank, and preparing to inflate away his debts. But he can’t do that because Greece doesn’t have a currency.
There is no doubt that a stable currency — that is, one that can’t be manipulated — is a very necessary stimulus to sensible economic policies, but the essence of socialism is that it doesn’t subscribe to sensible economic policies. It subscribes to fantasies, which have been nurtured from above.
Greece certainly borrowed its way into a gigantic hole, resulting in a Potemkin economic boom before the subprime government crisis hit, but a very reasonable question is why anybody forwarded the funds. The answer is that bankers knew that they would be bailed out.
Greece has been offered major loan extensions and interest rates close to zero, if they will just sign on the dotted line to extend and pretend. But perhaps the most scandalous part of this scandal is that non-performing loans have all been surreptitiously shifted to governments and international institutions, which is to say, taxpayers. Those taxpayers who have been lumbered most egregiously are the Germans, who are now exposed to Greek debt perhaps to the tune of 100 billion euros out of Greece’s total debt of over 300 billion.
Greece had effectively already had much of its debt rescheduled and reduced, but Tsipras’ intransigence is about to make austerity a whole lot more painful. One can certainly sympathize with the poor people who, out of economic incomprehension, voted for Syriza. One’s heart bleeds more for those who didn’t vote for them, or who voted “yes” on Sunday.
The lesson of Greece is that you can’t vote economic consequences off the island forever, and you can’t blackmail, spend or inflate yourself to prosperity. That lesson can’t be avoided, but it won’t necessarily be learned.