Friday, July 10, 2015

United by lower Grexpectations

Catching up the last two weeks with the history of the Greek debt, I am left with the strongest hunch that ‘crazy’ is the new mainstream. It appears that if some nonsense overwhelms the body politic, the antidote will almost certainly be product of another politicized form of craziness.

The most informing thing about the €380 billion that Greece owes is that the country does not have the means not just repaying, but servicing it in a meaningful way. All fiscal plans by the Greek government, including the one currently under consideration by the EU, project a magical turn in the country’s economy and the filling of state coffers as a result of minimum additional funds Athens can wrestle from the financiers, in return of promise to implement an effective austerity regime, the very thing that the majority of Greeks have vehemently opposed ever since it was set as a condition of further aid in 2009. The electorate first opposed it covertly, then openly, by voting in a radical Left government which considers the lenders blood-sucking terrorists.  By all appearances, the EU banksters and the Left lunatics have come to an amicable agreement this week, thanks mainly to France’s left liberal cave-in to the Syriza’s implied suggestion that Angela Merkel is a new incarnation of Inspecteur Javert 

In times of reason, premier Tsipras’ dealing hand would be in laughed off and he would be exposed as a hopeless s**t-disturber and demagogue.  But in times of ‘crazy’ he holds the high card. The ace in his hand is Greece-is-a-victim psychobabble.  To be sure, there are some things in his posturing in which I find more than a grain of truth. The financial crisis in Greece has started as toxic private, not public, debt. The fable that the financial collapse originates in Greek civil servants’ retiring en masse with full pension in their mid-fifties, is just another example of counter-crazy. I don’t subscribe to the theory that high unemployment is a contagious outbreak of mass laziness among the drinking classes. I really do feel sorry for the ordinary, below-euro-average Greek sweating hours in the ATM lineups. But all the same: Tsipras’ complaint doesn’t work for the same reason Senator Mike Duffy’s hope for sympathy is vain. As one cannot claim to be manipulated into accepting bribes, one cannot wash one’s hands of money one accepts as loans, by simply arguing that the lender has too much of it.  But for now, it looks Tsipras’ gamble has paid off and his referendum, if not wishing away the debt, means more bailouts and another postponement in paying it.

So, what gives?   Tsipras’ victory may be short-lived.  He made Germany dance to his tune but the anger and frustration with Greece remains. The country is by all accounts bankrupt. Anything, at this point – and under the prevailing rules of engagement – will be but a band-aid and short pause to government IOU’s and the return to drachma.  The retardant of the Greek collapse (or better, the end of masking it) is now the IMF following the crazy policy of the US (and EU) towards Russia.  The illusion of unity seems of paramount importance in trying to wall off Russia from Europe. But reality has a way of asserting itself. Europe is divided, not united.  Greek is bankrupt with minimal prospect of recovery in the continuing charades around its debt. The volatile Middle East and Africa pose the real security danger to Europe, not Russia. So, as always, it is pay me now or pay me later.

ETA (Jul 13):  Tsipras' 'victory' was short-lived indeed.  It appears that Wolfgang Schauble's view of Greece won the day when it came to the nitty-gritty of actual negotiations and Syriza had to back out of the negotiating 'mandate' it claimed was given to it by the referendum. In the end, the Hansa concept of EU prevailed over the Mediterranean bazaar view. Greece - for the time it remains in the Eurozone - will operate as German banking protectorate.  Will Tsipras' politically survive this?  The cynic would say, 'no problem, the Greeks understand the nature of the comedy, in which it does not really matter who leads it.'  The outcome will be the same. 

No comments: