There's no silver bullet here - what Greece needs more than anything is time
Published 09/07/2015 | 02:30
The Greeks, as we all know, invented tragedy. And a lot of people say they're at it again, after the nation voted to refuse the EU bailout rather than bow to the demands that came with it.
While the likes of Agamemnon, Oedipus, and Medea had no way out of their tragic fates, modern Greeks do.
In general, man jokes about things that depress him, but he usually waits until a certain amount of time has elapsed so that tragedy added to time becomes comedy.
Now, say you own a business. A customer owes you money and you are well aware that he has no hope of paying you back in the allotted term.
As a businessman, I've been on the receiving - or I should say, non-receiving - end of this very situation too many times.
So, when your credit customer goes bust, you have basically two options. One, you can force them into liquidation. You have little chance of collecting as a preferred creditor, but there is a measure of satisfaction in "doing the right thing".
Alternatively, add time to the tragedy. Work out a deal that spreads the pain over a longer term, but keeps the relationship alive in the credible hope that you may eventually get paid.
The second option may strike you as less morally palatable, but it's by far the one more likely to pay off.
Nobody really knows exactly how much money Greece owes, but the official tally puts the number at around €340bn - plus a lot more owed by Greek citizens who borrowed privately from foreign banks.
Back when the US government bailed out its private financial institutions, CitiGroup received $2.5trn and Morgan Stanley $2.04trn.
America even gave Bear Sterns $853bn, which didn't stop it from eventually going bust and getting picked up for $2 a share by JPMorgan Chase - run by Jamie Dimon, who borrowed the money from the New York Federal Reserve Bank, on whose board sat none other than Jamie Dimon. Should Greece have ever qualified for the silly amount of money it was lent? Well, Germany surely thought so - a thought provoked by Germany's desire to enable Greeks to buy German goods and services.
The problem is that it's now the Germans who stand to lose by far the most when (or if) the Greeks default.
Had the Greek government asked its people: "Do you want to remain part of the EU?" the answer would have been a resounding yes. Instead, it asked, in effect: "Do you want more pain and misery under the thumb of Germany?"
Ireland, remember, was recently in a similar situation, with debt totally out of control, but we were able to persuade our European partners to defer our foreign-lender debt with Anglo and Irish Permanent.
Now our payments don't start until March 2038 and will not complete until 2053. By which time our current head of state will be 114 years old. So what are the options for the EU and Greece?
Well, consider what has worked in Ireland since the very inception of this state.
From the start, we have had two currencies working in tandem. Until 1979, the pound and the punt were at parity, even when decimalisation came along. Then the currencies broke parity, and the punt dropped against the pound sterling.
Today, shops along the border happily accept both sterling and euro, giving a discount/credit adjusted on a weekly basis. It's not necessarily pretty, but it works. There is no reason why Greece cannot also have two currencies: the drachma for local and domestic transactions; the euro for all international trading transactions.
The solution of the euro for imports and exports and the drachma for domestic liquidity will buy time.
Greeks, as individuals, can decide if they want to take a huge hit by changing euro for drachmas - but at least they will have access to cash, even though their bank depositors will have been relieved of a large chunk of their savings in the process.
Unless Germany suddenly suffers a seizure of compassion and forgiveness, a two-tier currency is, I believe, the only way Greece can do what Germany, after all, wants it to do: stay in the eurozone.
If the Greek government acts more realistically than it has in the recent past, the drachma will appreciate in value.
In time, Greece will be able to fully rejoin the eurozone as a welcome and responsible member of the club.
Germany has constantly warned of the dangers of "contagion" should Greece exit the eurozone. Such fears are overblown, and, in any case, Germany needs to admit - at least to itself - that its chief interest in Greece has all along been to retain it as a customer.
Moreover, the Germans can soothe themselves with the knowledge that, whatever happens to Greece, Germany will remain the most powerful economy in Europe and will therefore continue to dictate terms to the rest of us.
As for "the rest of us" we can take satisfaction in the fact that one of the smallest among us actually stood up to the biggest.
Peter Casey is an entrepreneur and one of the RTÉ Dragon team