Monday, June 20, 2011

As the shit gets ever closer to the fan in Greece . . .

When I was still a young lad, I, like many other young girls and boys, imagined that ‘grown-ups’ were more intelligent and knew what they were doing. I am no longer young and growing older by the hour and learned long ago that the only real difference intellectually and morally between children and adults is that adults are older. In all other respects - in the tendency to dissumulate, to tell lies, to feign ignorance, to regard themselves as the centre of the world - they are more or less identical. Of course, we adults like to think we have matured emotionally, but when push comes to shove, it is the exception who doesn't resort to outright childish behaviour and there is no other difference. It is something I have taught my own two children, who are now 12 and 15, from a young age: don’t (I urge them) imagine ‘grown-ups’ always know what they are talking about. Grown-ups (I have told them) lie just as much as children and it is worse than when children lie, because adults should know better.
This is all a rather roundabout way of approaching the coming calamity that is the default of Greece, it’s exit from the euro, and – possibly – even real trouble in the streets. But what I write above is pertinent because too many of us, despite our habitual cynicism, assume governments and bankers know what they are doing and that governments, in theory beholden to a fickle electorate, always act in what they feel is their country’s best interest. But, of course, they don’t.
Everyone – every EU functionary in Brussels, every minister and civil servant in the treasuries of EU member states, every economist and every financial journalist – knows that the only solution to Greece economic problems is for it to leave the euro and rebuild its economy on a revitalised drachma. But you have more chance of finding a virgin in a brothel than an EU functionary willing to admit it. For once they do admit it, they also admit that the whole euro project and, almost by implication, the EU project as envisaged by its starry-eyed adherents, is just so much cobblers. That is not to write off the EU as once was, just the EU as now is and as many in Brussels would like it to be. They insist – ironically quite rightly – that only greater political integration will make the euro work, but are in denial that in the current situation of Greece, Portugal, Ireland, Spain and soon Italy (and, if my Bordeaux-based aunt is to be believed, soon France) going bust, bust, bust, achieving ‘greater EU political integration’ is about as likely as a woman regaining her virginity.
What it all partly boils down to is that they are saving face. And that is why taxpayers in the Northern EU states are being asked to cough up £110 billion pounds to stop Greece and – they fear – the other states at risk going down the pan.
The other aspect to this is, of course, that a great many French and German banks are owed a great deal of money by Greece and are desperate to get their money back. So the ‘bailout’ to Greece is nothing but a mechanism to pay them back as much of the money they are owed before the shit hits the fan. And that money, of course, will come from the taxpayer. Already the Finns are thoroughly disillusioned and have voted in great numbers for their country’s only Eurosceptic party. Elections are also due over the next 12 months in Germany, France and Austria, and you can bet your shirt that those seeking election or re-election will not do so by insisting the voters should pay ‘those feckless Greeks’ even more of their money. Interesting times.

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The really irritating thing is that is happening – Greece is unable to devalue or, at least, manipulate it interest rates – was predicted quite precisely by those nasty, cynical old eurosceptics. It is madness they said, but times were great, credit was easy, everyone felt prosperous and they jeered at the doomsayers as tired old farts. Whose jeering now?

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