Friday 23 August 2019

Vultures are already circling Athens now the Troika is in charge

People demonstrate in front of the stairs leading to the Greek parliament in Athens during an anti-EU demonstration in Athens calling for a 'NO' to any agreement with the creditors on July 13, 2015. Eurozone leaders struck a deal Monday on a bailout to prevent debt-stricken Greece from crashing out of the euro, forcing Athens to push through draconian reforms in a matter of days. AFP PHOTO / ANDREAS SOLAROLOUISA GOULIAMAKI/AFP/Getty Images
People demonstrate in front of the stairs leading to the Greek parliament in Athens during an anti-EU demonstration in Athens calling for a 'NO' to any agreement with the creditors on July 13, 2015. Eurozone leaders struck a deal Monday on a bailout to prevent debt-stricken Greece from crashing out of the euro, forcing Athens to push through draconian reforms in a matter of days. AFP PHOTO / ANDREAS SOLAROLOUISA GOULIAMAKI/AFP/Getty Images
Colette Browne

Colette Browne

Enda Kenny left all-night talks in Brussels yesterday morning saying the experience had been "bruising" but the only one who emerged with any injuries was Greek Prime Minister Alexis Tsipras.

Anonymous officials quoted in some media reports described the left-wing politician as a "beaten dog" - cowed into submission by the sustained assault he suffered from his supposed colleagues. Now that he has been put on a leash and has finally started to obey commands, Merkel and her compatriots are a bit more upbeat about the prospect of Greece staying in the eurozone.

Just in case anyone was in any doubt about the extent of Greece's capitulation, Merkel was explicit at a press conference yesterday that eurozone leaders "made clear that a nominal haircut is ruled out". It was not enough that she won; she wanted to rub her victory in his face. Her performance was reminiscent of a boxer knocking out an opponent - then dousing him with water to wake him up so she can hit him again. Over and over.

It's an odd sort of victory. The debt that everyone - from the IMF to German Finance Minister Wolfgang Schauble - has expressly admitted is unsustainable will remain at the same unsustainable level with eurozone leaders piling even more debt on top. The announcement is less an economic plan and more a sociological experiment - precisely how much austerity does it take to kill a country? With Greece's GDP already down 25pc, a precipitous decline usually only observed in post-war countries, we may not have to wait long to find out.

In the meantime, the Greek government should resign and no further elections should take place until the country emerges from its bailout. We now know that elections are a sham. A cruel con perpetrated on the Greeks to give them an illusion of autonomy, some degree of control over their fate, but they have none and that needs to be accepted.

The Troika view of governments is much like Henry Ford's attitude to cars: You can have any colour you like as long as it's black. On social media, as the talks went on, #ThisIsACoup began trending worldwide. Why try to disguise that reality any longer by going through electoral motions when they don't make any difference? Why continue to play along when it only serves the interests of the Troika, who prefer that a thin veneer of democracy mask the true authoritarian nature of their agenda? They hate democracy and that hatred should be exposed. Let them at least be honest about it.

This deal would have been the same no matter who was in office. Greece has gotten zero concessions, despite its large mandate in last week's referendum. A vague commitment to discuss the debt at some unspecified future date was always there and there is no new growth plan. Tsipras muttered that at least the €50bn privatisation fund, which the eurozone had wanted to manage from tax-haven Luxembourg, will now be run from Greece, but that is hardly anything to crow about. No matter where the sale takes place, the end result remains the same - state assets in a firesale with the proceeds going to prop up broken banks. No doubt the vultures have already begun to circle over Athens.

The deal is a triumph for cynicism, parochialism and myopia. The political futures of incumbent governments in other bailout countries were deemed more important than the plight of the Greek people. If Syriza succeeded, those governments would fail; so instead Syriza had to fail, and that failure had to be writ large so everybody in the region noticed it.

The consequence of this political protectionism is that a debt deal for Ireland is now definitively off the table forever, its death warrant signed by our own government. Last week Finance Minister Michael Noonan felt compelled to announce to the world that "our debt is sustainable" - even though the annual cost of servicing it, €7.6bn, has more than doubled in five years. In total, since 2010, we have spent nearly €30bn on interest repayments alone. Perhaps those smugly shouting, 'I told you so', and using the Greek defeat as evidence that a similar fate would have befallen Ireland if we had played hardball in 2010 should wipe the smirks from their faces and think about those figures.

Anyway, they're wrong. European banks were much more exposed to both Greece and Ireland five years ago than they are now and the risks of contagion, from either country leaving the euro, were huge. Now that those banks have been insulated, and taxpayers are instead on the hook, the Greek threat to blow up its financial system didn't carry as much weight. In fact, Tsipras soon learned to his horror that Grexit was actually the Germans' preferred option, which is why they have made the bailout contingent on a number of almost impossible tasks, like ramming through multiple pieces of toxic legislation in just three days.

Syriza did its best, but it underestimated the eurozone's ideological obsession with austerity. For zealots like Schauble, austerity is a god - there is no evidence it works but he has unshakeable faith anyway. The IMF, Nobel Prize-winning economists and pretty much every other economist all agree that more austerity for Greece will be a disaster. But the Troika will inflict it anyway, throwing good money after bad and ensuring the Greeks never repay anything.

Having finally succeeded in making Greece toe the line, eurozone leaders are cock-a-hoop, thinking their bullying makes them wise statesmen. But winning by using threats and intimidation instead of relying on the strength of one's argument is not a victory: it is coercion.

The cost could also be much higher than they think. Confidence in the EU as a place where democracy is respected, where solidarity and integration are valued, has been eroded. The price of their intransigence could ultimately be the European Project itself, which has begun to unravel with leaders also unable to reach consensus about a refugee crisis that has engulfed Mediterranean countries.

Meanwhile, even if a Grexit has been averted for now, the cost could be a Brexit, as the vindictive treatment of Greece has alienated the Left whose support David Cameron will rely on to win his forthcoming referendum.

Merkel is right when she says the most important currency in the eurozone is trust, but she has failed to recognise that there is a crisis of trust all over Europe - a crisis that will be much more damaging in the long-term than anything happening in Greece.

Irish Independent

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