Thursday 19 October 2017

The can's kicked down the road, but it doesn't matter

German Chancellor Angela Merkel and French President Francois Hollande pledged to uphold the sanctity of the euro
German Chancellor Angela Merkel and French President Francois Hollande pledged to uphold the sanctity of the euro
Thomas Molloy

Thomas Molloy

Finance Minister Michael Noonan was characteristically cautious about the new Greek deal last night, effectively warning that Greece might yet fail to provide a convincing list of reforms by Tuesday while Europe's finance ministers may fail to get the deal through their parliaments.

He's right to be cautious; every stage of Europe's debt crisis has been marked by an achingly slow advance followed almost inevitable by setbacks.

The new Greek government also faces a huge task to convince supporters in parliament and on the streets that this deal represents anything other than a retreat from Syriza's promises to scrap the bailout, end cooperation with the Troika and roll back austerity.

In a smart sop to Syriza, the term Troika will no longer be used, but the bailout remains and no debt has been written off.

That's no surprise; a Greek climbdown was widely expected and there was only a muted (but nevertheless positive) reaction on the financial markets following news of the deal.

One of the most revealing aspects of the endless talks over the past few weeks has been this calm compared to the early stages of the financial crisis when events in Greece, Ireland and Portugal sent the global markets into a frantic tailspin.

Back then, it was as if the world economy was shackled to a madman. That hurt the world economy and gave the Greeks an incentive to act up.

This time round everybody understands the EU's modus operandi. Like a corny James Bond film, eurozone finance ministers now appear only able to reach decision seconds before a bomb is about to explode. And just like a James Bond film, we can enjoy the odd plot twist safe in the knowledge that our hero will never be blown up.

The endless talks against a deadline followed by a decision to kick the can down the road just doesn't scare anyone anymore.

We live in a world accustomed to very quick decision making but speed is not always wise. After all, former Finance Minister Brian Lenihan's speedy decision to guarantee the banks has been the author of many of our subsequent misfortunes.

Nor is an inability to reach agreement limited to the 19 countries that make up the eurozone. The US political machine has also struggled to reach agreement over that country's budget.

Europe may have kicked the Greek problem to touch, but at this stage experience tells us that this is merely frustrating; it is not the end of the world.

Irish Independent

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