Between the Adrian and the Ionic Seas lies the “Mess” that is Greece. Even it ancient times the geographical area known as Greece, whose boundary lines have been redrawn many times, the last when that area know as Macedonia declared itself a sovereign state with a national identity to match, was never very unified. Athens and Sparta always seemed to be at odds and war with each other while the golden haired Alexander was Macedonian. Beware of Greeks bearing heritage. Homer did give us a great swash-buckler in the style of Errol Flynn and for that we can be thankful for all the variations on that theme that occupy our screens, both big and small.
Has the Greek problem really been fixed? Did Tsipras really fold like a card table and cross the un-cross-able (stupid spell check) red line he drew in the sand? What was the “new deal” he agreed to bring back to the Greek Parliament? And will this be the end of the Greek crises? Inquiring minds want to know, or maybe not, depending on one’s patience. First, just what is the real problem?
The real problem is that the former Greek governments committed such great frauds financially and economically. From Roman conquest to the over throw of the Ottoman rule in 1830, Greece has been its own country, sort of. European and American interventions, severe corruption (and this the cradle of democracy, go figure) have ideological differences have made Greece a rather special case. The Balkans were crazy enough but Greece has appeared quite insane as a country. On the other hand they have pulled off a linguistic coup in re-establishing the ancient Greek language through out the country. But historically, Greece has been unable to unite its separate regions or ethnological division under any more common cause than independence. Hence the chaos caused by corruption in political vacuums and shifting ideologies. The menace of communist takeover as orchestrated by Russia after second world war was stopped but never really extinguished. The Communist party was outlawed but numerous other communist allied parties have sprung up. The European influence caused Greece to drift into the socialist brand of political necessity of buying off her people with “the promise of the free good life” that is actually paid for by others with the wealth. The last twenty years have seen an expansion of socialist ideals and actual stupidity. Overly generous government aid pensions and a rule system for retirement that defies reason, let alone logic, have rendered the government heavily dependent on wealth transfers. Yet the people, far from willing to pay the fees and taxes to their government, have indulged in gross tax evasion and local corruption.
The cost of their present misery is 7.2 billions or euros of debt to various EU creditors. Let me put it simply, they aren’t good for it and never will be in their present economic condition. The last rigging of the bonds and loans were dictated by the creditors as represented by the IMF, the ECB, and the EU Commission. The Greek government acquiesced and would eventual lose power to other political combinations. One can be a communist at heart and still join middle of the road socialist parties. One can be a royalist Conservative and join middle of the road socialist parties. This is what makes governing the country difficult, there are no real core parties that define the population as a whole. So now we have Syriza, a left wing socialist party but not exactly fanatical. But it is a coalition of different persuasions and the majority tend to be on the fanatical end. So now that Mario Draghi has delivered his ultimate threat, which is a very simple get Greece into a financial rescue agreement or I will cut your banks off from the ECB, Tsipras has little choice but to convey that message to the current parliament. Of course no details of any rescue agreement have been reached but I should point out that nothing has changed for the EU creditors. Austerity and pension cuts and higher taxes starting with the VAT. These are the red lines in the sand that Tsipras vowed never to cross.
Is Draghi’s threat an idle one? No, not really. The Greek end game for the EU is to bring Greece into submission to the will of the EU. They are to be the example one holds up to all those in the other countries which suffer from excessive debt. The idea is to stop other Syriza like political parties from coming to power and pressing for debt reform, debt hair cuts, and possible rejection of the EMU. If one takes a look at the outstanding debt, both government and private sector including retail, one can see that any reduction of debt by taking a loss on those instruments would plunge Europe in general into a financial failure of greatest peril. This is the idiocy of the EU. If one cannot repay the debt one has taken on then one is effectively bankrupt. This is the European problem. Just as Zimbabwe continues to print more paper currency that is worth far less than the cost of printing, so the EU is attempting to stagger down that same path. Greece as a sovereign must be brought to conform tt the power of the European Parliament. Greece must learn that the votes by her people mean nothing to the EU.
This issue is not so much about debt as it is the power of the EU parliament. If the EU’s power is not enough to bring Greece to heel in obedience then the EU’s financial problems will come to light and that house of cards will fall. The EU is not China in that when China falls, and it will, we will experience an earthquake in the financial zone of 12 or greater. But the EU collapse will bring a great deal of dislocation and strife. On the other hand, for those on the left in Greece, they may not be willing to concede power to Brussels. If Greece gets cut off from the ECB’s money supply and all the other financial help from the EU it will be hard going for a few years. On the other hand they may have some help from Russia. Currently Tsipras doesn’t have the votes to push through an agreement to back down and cross all those red lines. If he tries to push the issue then he becomes a former prime minister.
Is there a compromise situation at hand? No and there never will be for the simple reasons that there is no win-win situation where the wants and desires are simply misstated. The two sides are polar opposites, there is no compromise. Greece can only pretend to pay the debt while her people suffer in a most serious manner. Any attempt to restore the status quo will result in result in a great deal of strife, some of it armed rebellion. The EU wants to crush Syriza but what the will get in return is Golden Dawn. And with Golden Dawn there is no bargaining, no compromise. The EU assumes Greece must play the “Prisoner Game” by the rules where cooperation is the best result. Only no one ever told real life prisoner’s that they must follow such rules and they don’t, only academics believe the outcomes are real. If Greece does fold, it is not the end of the game for the EU will have only kicked that can a few feet further. Greece can never repay and the whole mess will come back into play in another two years. The end game will be won when Greece defaults. The EU can never win, never reach a stalemate. The relative debt in the EU is far too great for that and the laws of mathematics have not been suspended for Super Mario Draghi. The longer this drags on the worst it gets for everyone. It is not a matter of if Greece defaults, it is a matter of when.