THE GREEK BAILOUT CRISIS : TRAGEDY OR FARCE

Okay, the first thing I have to ask myself when considering this question is why does everything that’s ever had to do with Greece or the Greeks either have to be a tragedy or a farce? I mean, there are simply no in-betweens! It’s a bit like something straight out of Italy or better still Sicily. The daughter’s disobeyed her father. Chosen a lover of whom he seriously disapproves and refuses to give up so either he murders the guy and the daughter kills herself or else he’s welcomed into the family and soon finds himself in line to become the next Don. It’s a bit like that with the Greeks. Either one thing or another without any compromise. You know, a little comme ci comme ca like the French or a little bit of this and a little bit of that like the English. But no, with the Greeks it’s a two mask situation. Mouth turned up in a smile because you and the family on holiday in Athens are sitting in a café enjoying your wine and kebabs, or else it’s turned down in a frown because you walked out without leaving a tip!

Actually it could have been worse. You could have been Germans who’d walked out without leaving a tip!  The bastards that all Greeks think are responsible for their economic hardships, troubles and woes because they dominate Europe, bankrolled most of the money loaned to Greece by the EU and are now insisting it be paid back in regular installments with interest!

Depending on how you look at things the great Greek Bailout Crisis is either a tragedy or a farce because in truth that’s the way the Greeks themselves taught us to look at things. After all it was their ancestors who invented drama and wrote the first plays and besides, they were the first people to give us the idea that situations could be looked at either one way or its opposite. Either tragedy or farce. So what then is the truth about the current Greek economic crisis? Let’s look at the situation more closely.

Greece and most of its people are currently experiencing terrible hardship. Not so long ago, for reasons only known to the Socialist Government of the time Greece decided to scrap its national currency the drachma, join the European Union and adopt the Euro. That meant tying their fortunes to much more powerful economic neighbours like Germany, France, Italy and Britain, but doing that created a serious problem. These countries made things. They were centres of manufacturing, agriculture and finance. They had something to sell. Had more than one way of earning money. With Greece it was different. Their economy relied heavily on tourism with a bit extra coming from agriculture, specifically olives and olive oil production. There was no oil or gas; no manufacturing or engineering. And the shipping industry it had long relied on to bring in some money collapsed in the face of competition from South Korea.

Never mind. The sunny Greek illusion had to prevail and would do so because of the country’s connection with its powerful allies in the EU. After all, now they were all happy smiling Europeans together! For Mediterranean Greece the eternal long holiday of sunshine and sea would continue! Trouble was, they made nothing, earned nothing and got into the habit of paying no taxes or dodging such necessities wherever they could. So for donkey’s years the Greek Government one way or another was skint. It had little income from taxation derived from a manufacturing base that might have employed large numbers of people. Instead they worked in vast and costly public services sectors. The makings of a tragedy was coming together. Greece made nothing and earned nothing and the Government had countless employees who demanded a regular wage. 

Never mind. Greece was part of the EU. It had friends it could count on. Counties with lots of money like Germany who formed a dirty great big cash cow of northern Europeans who’d always appreciate those sunny Mediterranean smiles! The Germans! With a Government that wanted to hold European nations into the fold of Europe at any cost! They just wouldn’t accept seeing sunny little Greece have to pull out and leave because of a matter of money! Euro-Crisis or not, the Germans, stinking rich with trade surpluses and main economic financiers of the EU Project wouldn’t let Greece go down the plug hole. The Greek Government desperately needed money to pay its public services sector and smiling all sunny in the councils of Brussels and elsewhere, particularly the European Central Bank, was the first to declared itself in need of financial support closely followed by Portugal and Spain! There the crisis was just a bit different. Financial investors in bonds issued demanded increasingly high levels of interest. This was because their economies were going down the tubes fast and Government bonds turning into plain worthless paper without any value behind them. The high rates they were forced to offer weren’t sustainable and soon Spain and Portugal also pitched up begging for money!

First Greece, then Spain and Portugal! If Greece junked out of Europe so would the others so Brussels had to cough up! In Greece the ship of Government needed help to pay salaries. It was floundering in heavy seas, it needed a bailout. Help was at hand. Brussels couldn’t let Greece go under. With help from the Germans it loaned that sunny Government 200 billion, under strict conditions of course! Top to toe they’d have to reform their economy. Seriously cut their public services sector and the wages of all those who continued to work there. Seriously begin the process of collecting taxes which very few Greeks were ever willing to pay. And seriously start thinking about some economic production!

Well that was five years ago! Since then Greece has seen 25% of its population unemployed and large numbers of its people destitute or bordering on extreme poverty. And the Greeks? Alas, few of them are smiling anymore because as everyone knows the time has come for the country to pay back the first installment of its loan. The Germans are waiting and Greece’s friends in Brussels are all insisting… PAY  UP… PAY UP… AND PLAY THE GAME!

The first installment of the GREEK BAILOUT SITUATION outlined above is known as THE TRAGEDY.

Second installment. THE FARCE

With repayment of the great bailout debt facing them the people of Greece have now got all grumpy with Germany. There’s been sour talk around. Like the Germans being willing to forgo its share of the debt in exchange for Athens or some other parts of Greek territory like the Greek Islands! Or even the hallowed and saintly Acropolis! There must have been jokesters in Germany who took the idea for a spin but it would certainly have fallen on furious Greek ears. They’ve always been an ultra-patriotic people, especially after recent Nazi occupation and desecration of their country and currently there’s some serious anti-German sentiment making the rounds. The result of all this culminated in the recent victory at the Greek General Election of the far left Syriza Party whose leadership campaigned on a platform of putting repayment of the loan from the EU onto a rocket heading for Pluto with terms of interest scaled back to zero and won close to 40% of the vote. Is that all? With such anger and hostile sentiment floating around in that country one might have thought it would be closer to 70%.

So the Left won and Greece has a new Leftist Government. Meanwhile German bankers along with senior officials of the EU have been appearing on television saying that Greece must pay the first instalment of its debt by due date. In a few weeks! And herein lies the problem and the essential making of THE FARCE. Essentially, the current Greek Government hasn’t got a pot to piss in. The one it replaced did its best to collect taxes. Did its best to reduce its burden of debt. Did its best to revitalize whatever economic production it could and in the last five years earned a few bob and paid its way. Just! But paying back five or ten billion as part of a loan? THEIR SUCCESSORS SIMPLY DON’T HAVE A PRAYER!  

In recent days the leftist Government of Greece has stated its determination to stay in the European Union. The main thing here I think is pleasing the Germans. It’s also stated its determination to negotiate the terms of repaying the loan. Promising its first installment in a few years rather than weeks or months. With this in mind it hopes to borrow more money from its current lenders in order to keep paying Government salaries.

IN OTHER WORDS IT SIMPLY WON’T AND CAN’T PAY A PENNY NOW, PROMISES WITH ANY LUCK TO PAY THE FIRST PART OF THE LOAN IN A FEW YEARS BUT MEANTIME IS ASKING FOR MORE MONEY TO KEEP ITSELF GOING!

And this is coming from a left wing socialist Government that promised the Greek people serious action if it puts them in power! It’s not that they won’t pay. It’s just that they can’t! In short, Greece borrowed a huge sum of money that its politicians fundamentally knew they could never pay back! Let’s look at the consequences. Is the current Greek Government taking a gamble? I think not. The Germans may be talking tough but even they know they can’t squeeze money out of a stone. There’s little to nothing that Europe can do to get the Greek money back. It’s like it’s gone down some plug hole into a bottomless pit, best known, as far as the Germans are concerned, as a Greek Siesta! Europe can demand the comprehensive reform of the entire Greek economy, demand all kinds of fiscal measures be taken by Greek Governments only none of it will help. Greece is and will continue to be up to its neck in debt for the next thirty years with little hope of reducing the burden, most of which will fall onto the necks of its people whatever the Government.

There are however a number of solutions, all of which may seem desperate but are perhaps not so far-fetched as they seem. Spain and Portugal are almost as indebted to the EU and German money as Greece.

The reason for allowing Greece to retain its membership is to prevent any catastrophic leak of more senior members. If all three opt out of then the Union comes close to collapse! However, what is there to stop Greece itself from opting out, untying its economic viability to the Euro and reintroducing its own historical currency, the drachma. The country’s burden of debt could be simply ignored. Put on a backburner. The only way of making the country repay the debt would be military action! What, with the Germans? Not too likely a prospect. Greek Government however, of whatever character, is hardly likely to stick two fingers up in Brussels’ direction. It’s a Mexican standoff. The EU knows it will never recoup the money it loaned to Greece and the rascally Greeks know that they know! YOU CAN’T SQUEEZE CASH OUT OF BIT OF GREEK MARBLE THE WAY THE GREEKS SQUEEZED IT OUT OF THE GERMANS. And the Germans know it too. It’s the Greeks paying them back for what they did to the country during the war. They took the money from Europe, smiled and made a few promises joke, joke.

There is of course another way for Greece to come out of its bailout crisis. It’s so simple and easy. Right there in front of their eyes. Why not do as the European Central Bank has recently done? Why not do what the Bank of England was doing with Britain in a similarly desperate financial crisis between 2007 and 2014? Why not do what the Federal Reserve of the United States Government did during its recent time of desperate economic crisis? Yes, they all did the same thing, polished up their printing presses and got printing hundreds of billions of pieces of paper called bank notes. The first to do it were the British. The  Bank of England when our banks ran out of money. THE BRITISH GOVERNMENT AT THE TIME CALLED IT QUANTITATIVE EASING a most wonderful phrase that’s pure bullshit and really means absolutely nothing. They just printed hundreds of millions of pieces of paper with the Queen’s head on them and called them banknotes. In the United States the American Federal Reserve did the same.  And pumped it into their banks.

This mass printing of pieces of paper by Government was an activity of exceptional economic desperation. The paper itself had NO REAL ECONOMIC WORTH because it was backed by nothing of economic value like gold or major trade surpluses. It had nothing of substance behind it. It’s value was entirely illusory. Bits of paper at best, yet on the basis of such an illusion, sold to the public of both nations, that public was assisted in continuing to believe that the money in their pockets was worth something. That it retained its purchasing power. The last time this trick was pulled was in 1920s Germany when the economy collapsed, the German currency became worthless and so huge amounts of money with enormous denominations increasingly were printed. It was a process known as hyper-inflation, causing untold misery, poverty and despair for almost the entire population and playing a major part in Hitler’s rise to power. The last nation to print money en masse was Germany. Its catastrophic result led the great economist John Maynard Keynes to formulate his economic theories and the process was never repeated.

Until recently that is! For a country to print money without the backing of gold reserves or a healthy trade balance to support its value has for eighty years been regarded as an entirely unacceptable and dangerous practice even in times of emergency. Yet it was done by the Governments of Britain and the United States who sold the deadly idea to their unthinking populations without so much as a murmur.

But wait! In recent weeks the EU Central Bank has announced its intention to inject 1 trillion Euros into the economies of EU members. This is to reinvigorate their stagnant economies so we’ve been told. One trillion Euros. Not a billion but a trillion! Here it’s worth asking a question. What will such a mass printing actually do for the value of the currency not only in Europe but also on the international markets? The result wasn’t long coming. Whether it’s a plain statistical book value or a real production of banknotes it can only have the ultimate effect of reducing confidence in current value. True, value is only a relative thing but there’s always a standard rule that applies. The more of any paper currency in circulation the less value it has.

In this respect the Greeks might consider enquiring into circumstances that would help them reduce the burden of their bailout debt. One of these might be using Government printing presses in Athens to produce hundreds of billions of Euro notes. They could use these to pay their employees but perhaps more important, use them to build up the book value of the Greek economy. Alternatively, they could print huge numbers of Euro currency to hold in reserve, give up their membership of the EU and tie to the Euro and revert their currency to the old Greek Drachma which of course they’d certainly want to print with a comprehensively new appearance. One possibly might be an illustration of Greek War hero Manos Glezos pulling the German swastika down from the Acropolis!

All the above has a deeper, altogether more fundamental meaning attached to it. Namely the real value of money at any time. It is the real rather than the notional value of money that attaches the element of FARCE to the great Greek Bailout Crisis. For what is real at any one time is continually changing. In short the value of money is an illusion that has no reality apart from what we are taught, indeed led to believe it might have. What we can do with it and how much it’s worth at any one time can change in an instant. After all, all money actually is is an idea attached to a piece of paper and cemented by social consent if you will. And even if it is only illusion provided us by people able to do so, it is what makes life possible and the world go round for the billions of people who live on it. An illusion that holds everything and everyone in place with an absolutely fixed and accepted idea that what is, is the way it should be. We ask no questions about why these pieces of paper and their supposed value regulate our lives but maybe now the Greeks should. Just abandon your debt. Leave the EU and your unsustainable ties with its Euro and cast off your misery. Print millions of drachma that will be equally worthless but at least you’ll know that they’re your own. A bit like British pounds sterling. Much depends on how successful a Government can be in persuading a people to accept its illusion, eat their bread and drink their wine with a happy smile on their faces knowing that death comes to us all.

And in the meantime don’t be too hard on the Germans with their philosophy of hard financial reality and demands that all the debt be paid back. It’s only a kind of objective idealism that historically drives them into dark corners of a cold, hard world of northern European reality that would be worthless without the warmth and the wine of Mediterranean dreaming and a quiet siesta in the sun. And here again we see the two opposites. The tragedy of northern European achievement and the farce of Mediterranean contemplation and idleness.