Reflections on the Greek Debacle

In the country of its birth, true democracy is dead.  The voice of the people, heard as comprehensive support for the OXI (no) vote was completely ignored one week later and a new austerity package was imposed on Greece as the Greek Prime Minister capitulated under intense pressure from the EU Troika.

Austerity on steroids is back, fifty Billion Euros of Greek national assets are to be placed in a Luxembourg trust fund pledged as debt security, taxes are up, pensions down.  The Greek economy is crippled for at least two generations.  Fiscal policy is directed and approved from the EU.    In short, Greece has sold its national sovereignty down the river to stay in the Eurozone. 

The power of international capital has never been so clearly demonstrated.

What is the future for Greece, and by extension for the other members of the so-called PIGS group?  David McWilliams, an Irish economist thinks that over time, tourism, one of the largest economic sectors in Greece will become largely foreign owned.   (See Here).  He goes on to suggest that the majority of consumer goods will be imported, and all profits will be subject to foreign, mainly German, repatriation, leaving Greece impoverished.

Unpicking the events of the last few weeks, it is clear that the EU and Merkel in particular negotiated in bad faith, never having the intention of settling with anything other than the crippling austerity package that is to be implemented.  The former Greek Finance Minister confirmed this, memorably saying that they might as well have sung the Swedish National Anthem for all the response and attention their proposals received from the EU delegation,

To put a political slant on it is obvious that the European authorities fear that a recognition of the democratically achieved No vote would encourage the rise of left-leaning parties elsewhere in Europe. It also tells me that this fight is not really about the debt itself, but part of a much larger political struggle over who will actually control the EU, the people who live in it, or the political and financial elite.

Finally, it demonstrates to me the truth of something that Lord Jenkins said in the run-up to the creation of the Eurozone – financial unity is unworkable without political unity.

Can you in all honesty see Germany and France surrendering sovereignty each to the other? 

Wait for the next instalment in Portugal, or Spain, or perhaps Ireland.

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