Thursday, June 18, 2015

Seems like the Greeks will soon be making that drachma out of a crisis - finally. But hold onto your seat belts, it could be a very bumpy ride

You might well have heard the anecdote about a visitor to Ireland asking his way to somewhere. ‘Well,’ declares the Irishman he consults, ‘first of all, I wouldn’t have started here.’ Chortles all round and quasi-racist reflections on the ‘thick Mick’. Er, not quite.

Like many such stories, the boot is, actually, very much on the other foot, and the joke isn’t on the ‘Oirishman’, but on the visitor. Furthermore, there is a great deal more sense in that reply than in much of the WASP logic it might seem to offend. Similarly, 40 years ago a friend and colleague of my father’s who was working in Northern Ireland and had taken a weekend off to visit Galway, stopped at a local newsagent’s to buy his copy of the English Daily Telegraph, only to find that all they had on sale was the edition from the previous day. ‘Do you have today’s Telegraph?’ he asked politely. Sorry, sir, he was told, if you want today’s edition, you’ll have to come back tomorrow. Again there were chortles all round when he told the story and when it was repeated - in those days chortles from me, too, and repeat tellings of the tale by me.

But hold on: there is a seam of impeccable logic in that supposedly quaint ‘Oirishman’s’ response. If, as in those pre-internet, pre-motorway and more or less pre-anything else days, it took more than a day for a consignment of the ‘London papers’ (which many an Englishman could not do without, it would seem) there was no earthly way any newsagent in Galway would be able to stock and sell today’s papers today.

If, as quite possibly the newsagent assumed, my father’s friend was keen, for whatever reason, on having that particular day’s paper, he was best advised to return the following day to pick one up once it had arrived. I am no longer chortling; it makes perfect sense to me. The advice to the visitor seeking directions is similarly sage: well, if that’s your destination (it says), you have made the task even harder for yourself by starting from this point.

The two stories - the second after the first - occur to me regularly when I hear the latest news about ‘possible Grexit’, ‘the Greek government defaulting on its debts’, the ever-growing likelihood of Greece

eventually leaving or being pushed out of the eurozone (and, today, even the suggestion from one Greek minister, that Greece might even eventually leave the European Union). There was another meeting of EU finance ministers today and it is scheduled to carry on tomorrow if needs be, but, dear readers, it is now obvious to all and everyone except a deaf, dumb and blind sow, that it will all end in tears one way or another. The Greeks can’t stand down and what is fancifully and rather heroically called ‘the Troika’ can’t do so, either. Both sides have their - very good reasons for standing their ground, but crucially both sets of reasons are in no way congruent. In other words: if you want to end up with a solution which is equitable for, and acceptable to, both sides, the situation as it stands now is no where to start from.

There are of course, at least on the side of the Troika, many brave declarations that a solution can still be found, but who are they kidding? And it’s not the money they - the IMF and the European Central Bank, as well as assorted ‘investors’ - will lose if the debt is written off, which irks them, it is the precedent: if Greece can be cut that much slack other countries will ask who weren’t cut so much slack and buckled down - notably Ireland which has come out of its own financial crisis smelling or roses and which can hold its head high - we weren’t we? We were we made to bow and scrape and beg and made to look like vassal states to the EU?

Another, equally as serious, danger is that those sitting on piles of cash who are in the business of lending to governments will think not twice or three but a great many more times about who they lend to. That means that those countries who most need loans are the least liable to get them. Perhaps a brief resume of the whole farcical situation is useful (this one courtesy, as always, of course, ’cos I really am no sage in these matters, from the several radio, TV and newspaper reports that have come my way): the present argy-bargy - the Troika demanding that pensions must be cut even more, that public assets must be privatised and the rest if Greece is to get any more money - is itself quite farcical. That money, if the Greeks get it, will only be used to pay off previous loans, which themselves were only granted to pay off even earlier loans.

The essential problem, a great debt of gigantic proportions, one I hear which now stands at almost double - 180pc - of Greece’s total annual income, still remains untouched and is in no danger of being reduced. So if you’re looking for a route to reach a happy and peaceful resolution to the present crisis - ouzo, schnapps, grappa and cognacs all round to celebrate a job well done - here is most certainly not the spot you want to start from.

. . .

All that makes it sound as thought the EU, the ECB, the Toika and the rest of that sorry bunch are on the back foot. Nonsense. The Greek government is also between a rock and a hard place: it cannot and dare not give in. The Greek prime minister Alexis Tsipras, who leads the ‘left-wing’ Syriza party is buggered, snookered, up shit creek and then some.

(NB I leave ‘left-wing’ in quotes not because I suspect Tsipras is nothing of the kind, but because calling someone or a party ‘left-wing’ is usually intended as an insult and it is an insult I don’t want to deliver. So quoting ‘left-wing’ has allowed me to make that point clear.)

Tsipras and his party were elected because they vowed to stand up for Greece and her people, unlike previous governments who seem to have allowed themselves to bend over and be fucked as often as it suited the Troika, on the understanding that their personal circumstances remained unaffected - I doubt whether many of the previous government are yet going hungry, but unfortunately it seems an increasing number of the poorer Greeks are.

Europe’s pollyanas are decrying the doom merchants roundly. Greek can default, they declare, re-introduce the drachma, boost their economy, holidays would be cheap for the rest of us, it might not end all that badly at all, and why, who knows, pigs might indeed fly. To which I can only add that if they do, it will be for the very first time in recorded history

According to the bod whose report I heard on Radio 4’s PM news programme an hour or two ago, defaulting on the repayment due to the IMF is not quite the real danger. Many countries, Zambia, Cuba and Cyprus to name just three, have done so and the seven horsemen still failed to turn up. What would really do damage all round is if Greece, a month later, also defaulted on a repayment due to the European Central Bank.

As part of its statutes, it seems, that action would mean it would simply have to close down Greece, with no more cash from ATMS and the rest. And that would spell real trouble. It wouldn’t mean that Tsipras would no longer be welcomed at the chancelleries of EU member states. He could live with that. The real danger is that Greece might descend into civil unrest and then civil war. And the country has a history of political instability.

Quite apart from the rule by a military junta from 1967, when it seized power in a coup, until 1974, there was also what we understated Brits call a ‘spot of bother’ in 1935 when there was another attempted coup. It wasn’t successful, but eventually led to what many regard as a thoroughly rigged referendum to reinstate the monarchy.

There’s no suggestion that history will repeat itself. For one thing the world has changed. But in recent years we seem to have heard very little of those nasty thugs from Golden Dawn who, unlike our Northern European crypto-fascists, publicly admire and hanker after the kind of fascism which took over Germany, Spain, Portugal and Italy in the 1930s. It is not too fanciful to suggest that in a country bearing its unfair share of taking care of people fleeing Ethiopia, Libya and Syria (as is Italy), Golden Dawn might well find a great deal of popular support among a poor Greek population at its wits end. Could there be civil war? Who knows? But it is not at all unikely.

Into this mix add the murky ambitions of Recep Erdogan, Turkey’s far from democratically-minded president who is still smarting from humiliation in recent elections when his party lost a substantial number of seats in parliament (and the Kurds gained a great many more) and who might not be averse to stirring matters a little in the affairs of Turkey’s arch foe Greece. And then, of course, there is Putin. Ah, Putin, what a transparent man he is.

It is fashionable to insist that Putin hasn’t the resources, least of all the spare moolah, to help the Greeks out of a hole. But that is beside the point. In saying that, those who insist Putin is no real factor in this whole stupid situation are making the classic mistake of applying their very own standards to a man and country who dance to their own tune. Russia has already a rather useful foothold in Cyprus, acquired by a loan here and there, and the developing crisis in Greece, especially if it did experience civil unrest, might well strike Putin as an opportunity to do whatever might embarrass the EU most. Well, I would, too. Wouldn’t you?

All that - I have added thoughts of my own to what the Radio 4 bod was explaining - is still in the future. It would seem the real test will come when Greece is due to pay back what it is due to pay back to the ECB. Will they default on the IMF loan due more or less now to have more of the readies to pay back the ECB? That’s possible. But it still goes nowhere near tackling the real problem of is core debt. Not for the first time I am obliged to resort to what is now a cliche, the old Chinese curse on someone that they might ‘live in interesting times’. Times are certainly interesting and a likely to become even more interesting.

. . .

I’m sorry that none of this here is in the slightest bit original, and I apologise for that. I have no better sources of information than you who is reading this. I run this blog for many reasons, by no
means the least of which is that I enjoy writing, and so far this is the only writing I do despite my high-flown pretensions. I am, however, trying to write not one but two radio plays, so maybe the time will come where I finally do put my money where my mouth is. There’s a great Texan phrase - I think it’s Texan, perhaps it’s from Arizona - which does describe a certain kind of person. That person is said to be ‘all hat and no cattle’. Well, so far, dear reader, I have an enviable collection of metaphorical hats, but so far not one metaphorical cattle. None. Wish me luck.

There is, of course, ‘my novel’, but despite several naked appeals to you all to buy a copy, read it and admire it, no one has yet done me the honour. (I would know because I would get notice of a sale from Amazon). So let me repeat it: you can find out more about it and buy it if you are so inclined here. And it really is not at all bad. On a scale of 1 to 10 I would give it a 6. Modest enough for you? Oh, and if you do check it out, I do urge you to remember the very good advice ‘never to judge a book by its cover’. Speaking of which, here is the cover (above left).

Pip, pip.

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