There’s method in Greece’s madness

The real madmen are those who created the euro, this cockeyed construct, who thought political dreams and vanity could trump economic sense and cultural and national differences

In the upper reaches of the Euro elite, where leaders are forever driving up to summit meetings in shiny German cars and looking grave and self-important for the cameras, where smooth diplomats know that the way to get business done is to do it discreetly with fellow officials, there is no surer sign that a colleague has gone stark raving mad than him announcing that he is going to hold a referendum on matters European. It is bad enough that David Cameron has decided to put Britain’s future in the European Union (EU) to the voters. But at least the UK Prime Minister has given warning several years in advance and has enlisted the support of the British business establishment to win his vote in 2017.

By contrast, the Greek Prime Minister, Alexis Tsipras, announced on Friday that he wanted to hold a referendum in Greece on the Eurozone crisis yesterday. In the eyes of the Euro elite, this momentous decision made Tsipras the instant winner of the European madman of the year competition. Several years ago, when his now forgotten predecessor in Athens attempted a similar manoeuvre, demanding a public vote, the Germans ordered Georges Papandreou not to be silly. The then French president, Nicolas Sarkozy, told US President Barack Obama that the Greek leader was a “madman”.

Truly, that was the pot calling the kettle noire. Now, Tsipras wants his own vote. What does he think he is doing? Does he realise that this is not how the Eurozone and the EU work? Who knows what will happen when Greek voters are asked whether they approve of the final offer of new terms from stricken Greece’s creditors? Goodness, the voters may say ‘No’.

So exasperated were the other Eurogroup leaders that they decided that the referendum move means their latest offer of credit is void and Greece is on its own. That fear of referendums on the part of EU leaders and officials is rooted in bitter experience, of course. The messy attempt to smuggle the integrationist Maastricht Treaty past European electorates in the early 1990s was followed by the long-running wrangle over the abandoned EU constitution and the Lisbon Treaty. Voters are awkward. Sometimes they do not do as they are told by the leaders and officials who do the deals. Why take the risk?

But Tsipras is certainly not mad, or not in the sense that he has lost his marbles. Despite his Marxist beliefs and trainee demagogue antics, there is something rather compelling about the cunning way in which he has handled this crisis and declined to be railroaded by the corporatist EU powers-that-be, even though he has been slapped in the face (literally, last week) by the atrocious Jean Claude Juncker, the federalist president of the EU commission.

This is to say nothing of the ineffective behaviour of the over-rated German Chancellor, Angela Merkel. But surely the real madmen here are not the Greek Marxists at all. The real madmen are those who created the euro, this cockeyed construct, who thought political dreams and vanity could trump economic sense and cultural and national differences, by creating a currency union on a vast continent without the necessary safeguards.

Botched-together experiment

Yet, instead of facing these realities, and accepting that the EU model as currently constituted has had it, the Europhile leaders intone pompously about EU values being agelessly sacrosanct. It is as though these men and women believe themselves to be functionaries of the Holy Roman Empire, rather than representatives of a modern botched-together political experiment that was only created in its latest form when German and French politicians misdiagnosed the consequences of the end of the Cold War as recently as 1989 and prescribed the euro.

As those in the markets brace for the likelihood of Grexit, and a mammoth default on debts of more than €300 billion (Dh1.23 trillion), it seems likely that Tsipras has wanted Greece out of the Eurozone all along, pretending throughout the negotiations that he is trying for an accommodation and debt relief when really he wanted to leave. That is what observers of Syriza, his party, believe.

But Tsipras had a problem when he came to power. Although many Greek voters liked his style, they also liked the euro because it meant membership of a supposedly democratic club that conferred respectability. That is why he had to be seen to try for a deal, to create the illusion of good faith, so that he can say to the Greek electorate that while he did his best, the wicked architects of austerity — the central bankers and International Monetary Fund (IMF) technocrats, who want to make poor Greek pensioners homeless — would not see sense. Now, Tsipras may win either way.

Either the creditors retreat in the next few days, because European financial institutions are exposed and the IMF is looking at a giant hole in its books, thus enabling Syriza to proclaim victory. Or, much more likely, Greece defaults on its debts and reintroduces the drachma as its currency against a backdrop of grievance and antiGerman feeling that will serve the Greek Left well for generations to come.

Leaving will not be easy, contrary to the predications of British Eurosceptics, or at least not straight away. The experience of previous major defaults and hasty reorganisations suggests that it is extremely difficult to hold down inflation. It is also unlikely that the high-taxing socialist Tsipras will introduce the capitalist policies and reforms that will attract inward investment and grow the economy.

In such a fraught atmosphere, Cameron was given a few minutes to read out his proposals for reform to EU leaders last week. His demands — on benefits and the promise of a post-dated cheque, guaranteeing who knows what from the other countries after the referendum — are pathetically small.

There remains one fascinating other possibility, however, which may get the escapologist Cameron off the hook in that style of his to which we have all become so accustomed. If Greece does leave and the effects are explosive, then it might — just might — finally persuade the Euro elite that their approach is bust and that what is needed instead is a way for Europeans to trade and be friends without the architecture of an integrationist, incompetent, failed super-state.

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