Saturday, 4 July 2015

A Greek Tragedy

So, Alex has put up a spirited defence of his nation:

"They have decided to strangle us, whether we say yes or no", said a Greek woman to me yesterday.

"The only choice we have is to make it quick or slow. I will vote "oxi" (no). We are economically dead anyway. I might as well have my conscience clear and my pride intact." 

I can't really argue with the opening lines of his article, but it really is all bloody downhill from there:

At times of financial strain, a country's currency issuer, its central bank, should act as lender of last resort and prime technocratic negotiator. In Greece's case, the European Central Bank, sits on the same side as the creditors; acts as their enforcer.

Well, yes, this is one of the obvious consequences of being a small player in a monetary union. It's one of the many reasons sane people don't want to be part of the Euro.

EU Institutions are now openly admitting that their aim is regime change. A coup d'état in anything by name, using banks instead of tanks and a corrupt media as the occupiers' broadcaster. The rest of Europe stands back and watches. Those leaders who promised the Syriza government support before the election, have ducked for cover. I understand it. They sympathise, but they don't want to be next. They are honourable cowards. They look at the punishment beating being meted out and their instinct is to protect their own. 

I'm sorry, is this a surprise? The EU is all about homogenising Europe to a point where it becomes a trivial exercise to implement a superstate. I don't want to sound like a deranged 'KIPper here, but this is just an inevitable consequence of any bureaucratic organisation, whether it's the Fed, the EU, the civil service, a bank ... bureaucracies always want to grow their fiefdom, their reach and their power. So why wouldn't the EU want a more compliant and obedient partner running Greece? It's not exactly a shock to anyone except the Greeks, apparently. It must be wonderful to have retained childlike naïveté, despite being one of the oldest civilisations in the Western world.

Corruption and tax evasion had been rife for decades. Accounts were falsified in order to facilitate entry into the Euro. Unforgivable economic crimes were committed. These weren't committed by most ordinary people of course - the very people now asked to take on the burden of the follies of our rich oligarchs. Corrupt politicians who passed the country back and forth like a joint were quick to secure their money in Swiss bank accounts. But we must share in a collective responsibility for them. We all knew what was going on and we either became part of it or didn't rebel soon enough or loudly enough.

And having said that, are you now exculpated? You seem to be saying that because you've had a really tough five years, that's undone all the decades of corruption? I don't think so, sunshine.

Those factors are what put us on the front line when the global financial crisis began to unfold within the Eurozone. All those systemic flaws are what made Greece the weak link when the earthquake hit. But we didn't cause the earthquake. We just lived in creaking houses that went down easily. 

Well, yes. And this is what thousands of people (including deranged 'KIPpers) warned would happen. But the world's oldest democracy, and presumably the wisest, still voted in favour of doing so. Possibly because of the decades of normalised, socially acceptable corruption. Who knows?

Greece should have been allowed to default in 2010. Default is a normal part of debt, not some monstrously catastrophic event. Germany has defaulted on its debts four times in the last century. Italy six. Default is reflected in interest differentials. An element of interest on a loan is of course "rent" for using someone else's money, but the reason Germany's government 10y bonds trade at below 1% and Venezuela's at over 24% is not whim. It reflects risk. Removing that risk is the real moral hazard.

But Alex, you can't default if you're part of the Eurozone. And fuck me, no person can reasonably say that this was not immediately apparent when the idea of the Eurozone was floated. Also, is once every 25 years really "normal"?

"Stop whining and pay what you owe." "Nobody forced you to take the loans in the first place." "Why should taxpayers elsewhere pay for your extravagance?" There was some truth to all of those things back in 2010. There is no truth to them now. We were forced to take the loans. That is precisely what happened. We were told "do this for all of us", to avoid contagion. Less than 10% of the "Greek" bailout has gone to Greece. The rest has gone to strengthen irresponsible financial institutions, mainly French and German, which were heavily exposed. 

Call a waaaambulance, please. When a libertarian points out that the main beneficiaries of government intervention and regulation are the incumbent corporate interests, Alex is the first to scoff. Social democrats are very keen on the state running as much as possible, and looking at a very social democratic EU, I can't see why Alex is objecting to social democrats behaving like social democrats always behave, rather than how he thinks they do or should do.

I'm not surprised that 90% of the bailout went to irresponsible banks. This is what the state does, support powerful vested interests at the expense of the taxpayer. How many more times do you need to be slapped in the face with it before you realise that it's the problem, not the fucking solution?

There was no provision within the Eurozone for what happens if market shock creates sudden and dramatic divergence between countries' economic cycles. (Emphasis is mine.) We were no longer individually in charge of basic economic levers like quantitative easing or devaluing our currency - a standard response in those circumstances. Our fates were entangled. We could either devalue the whole of the currency which would help countries severely affected by the crisis or not devalue which would help countries like Germany which were in a more robust position. We were told: "do this and we will look after you". Whatever it takes, said Mario Draghi, to convince Greece to take yet another loan.

Duh. Just remind me who voted Greece into the Eurozone? Did no Greek notice this up front or think it worth mentioning? And did you really think the Germans were going to devalue the Euro for GREECE? For fuck's sake, man!

There are many, many things wrong with the EU: lack of accountability, financial and electoral; overreach; enforced homogeneity and more, but ultimately it suffers most from the disease of control: there is a lot of power for powerful countries to use on less powerful countries. Greece may be the canary in the coalmine for people who want to see where it's going, but I suspect most Federasts are secretly on board with the idea of a European superstate taking it's "rightful" place on the world stage.

This is, however, ultimately a case where both sides need to lose: the Greeks cannot undo decades of dodgy business / tax / ethical culture in a couple of years of austerity and they definitely own the pain of their decision to join the Eurozone with all the consequences, but equally the EU's desire for regime change to suit their corporatist aims is hugely repugnant.

I just wonder whether pro-EU people will defend the EU's behaviour or whether they will admit the mask has slipped a little too much now?


John miller said...

5th century BC - birth of democracy

2015 birth of the first federal EU state

patently said...

But why didn't the Eurosceptics warn everyone that this would happen before they all jumped into the Euro?

Oh, wait, we did. Again and again.

profoundly_disturbed said...

Well written piece, keep them coming.