Greece must now be ordered to leave the euro
It is no use pretending that the buffoons who pass for a government in Athens can solve this economic crisis
As the Greek debt standoff approaches its denouement – oh please let it be so – judgments are becoming easier to make. The most obvious (obvious all along, it might be said) is that the sooner Greece leaves the euro, the better. If a legal way of forcing the Greeks out can be found, it should be used.
In any case, this debilitating charade has carried on quite long enough. For once, the German high command is correct; even if some sort of a compromise could be cobbled together, Greece’s hard-Left Syriza-led government couldn’t be trusted to implement the stipulated reforms, and a few months down the line, we would be back in exactly the same position.
And if Europe did find a way of accommodating the demands of the Greek prime minister, Alexis Tsipras, what next for the ever-more fragile political and social stability of this troubled continent – to be held to ransom by the equally deluded populism of Podemos, Marine Le Pen and Geert Wilders?
However this weekend’s referendum pans out, there can be no possibility of another bailout as long as the buffoons that pass for a government in Greece remain in power. Greece asks for debt cancellation; let them have it. But the only practical way of achieving such an outcome is to default, leave Europe’s absurdly misconstrued monetary union, and start again.
The working assumption has to be that this is indeed the Tsipras game plan, for, despite his denials, there is no other way of explaining the hokeypokey of his negotiating tactics. Whatever else he might be, he is not a complete fool, and he must know that his two substantive demands – to end the austerity but to stay in the euro, suckling, like some kind of welfare dependent, from the teat of international hand-outs – are incompatible and will never be acceptable to eurozone partners.
The “democratic mandate” Mr Tsipras cites in support of his stated goals is laughable. Democracy can mean many things, but what it is definitely not is simply voting for some kind of utopian land of milk and honey and expecting others to cough up the means of providing it. If this was democracy, we would all be at it.
In the grand tradition of the revolutionary Left, the Greek premier perpetuates a massive deceit on his people which looks destined to end in utter ruin. Many Greeks say they have nothing more to lose. I say, look at Venezuela, reduced to an economic basket case by years of Left-wing ideology, and think again. Greece’s government offers only a dream; it has no solutions.
Many of Syriza’s supporters believe that the hated Troika is out to overthrow a legitimately elected administration. Shocking, and also true. That’s exactly what this is about – but why should it come as a surprise? International creditors need a government they can deal with, not a bunch of fantasists. If it is delusion the Greeks opt for, good luck to them – but they cannot do it while in a rulesbased monetary union.
Greeks are faced with an impossible choice in Sunday’s referendum, assuming it happens. A yes vote is a vote for the euro and years, possibly decades, of austerity; a no vote is a vote for Syriza and economic suicide.
Leaving the euro can be done in two ways. Executed in a planned and orderly fashion by a responsible government, it would offer Greeks hope for the future by restoring lost competitiveness and reversing the current exodus of capital. Yet with Syriza in power, all these supposed benefits are likely to be squandered.
Like many far-Left regimes, this is a government that seems to prefer chaos and universal impoverishment to order and middle-class advancement. Instability is the very lifeblood of such regimes, allowing the snake-oil demagoguery of their leaders to flourish and their clientele to be shoe- horned into key positions. That process has started in Greece, with conservative-minded officials widely purged and replaced by apparatchiks.
Once pushed out of the euro, we can be pretty sure how things would go. Deprived of access to the capital markets, the government would soon turn to the central bank printing press for its funding. As inflation takes off, price controls would be imposed, adding to already acute supply shortages. Nobody would want to invest in such an environment, even with a more competitive exchange rate, and therefore much lower asset prices. The repatriation of capital which a devaluation normally triggers, as money withdrawn comes flooding back in search of a bargain, simply wouldn’t occur.
The EU’s responsibility for this almighty mess is not in doubt, but enough is enough. Five years of crisis must be brought to a head, with Greeks exiting the euro, and once they have come to their senses, installing a government with the stomach for painful reform, fiscal retrenchment and monetary discipline.
Without these things, Greece has no chance of future prosperity. Syriza represents little more than the fantasy politics of the student union. It has no place in the real world.