Tuesday 10 December 2019

Warning sign in Greek tragedy

Was this the week where the first chink appeared in the strategy of the ECB to cannibalise the lives, and future, of a continent in order to preserve the interests of French and German bankers?

The French initiative, where 50 per cent of Greece's debt to certain bankers will be rolled over for 30 years, certainly walked and quacked like a new policy of managed default. Sophists and economists can dress it up whatever which way they want, but our amoral French 'partners' appear to have realised the possibly even more amoral Greeks either can't or won't pay.

Though Angela Merkel may yet learn the hard way you can never trust collaborators, for now, when it comes to Greece, the favoured public option is still the mailed fist. It hardly enhances the concept of 'integration' when the image of Europe that is presented to the world consists of austerity plans being bayoneted through bloody streets. Still, as Greek MPs were smuggled out of their parliament to avoid anarchist mobs, it was at least clear that, like all good Prussians, the ECB will fight to the last drop of Europe's citizens' blood to ensure its balance sheet is preserved.

Greece is not exactly a case study in political or economic morality but state violence is the clearest indicator of a collapse of political legitimacy. And the Greeks can hardly be blamed for revolting against the current insane EU economic policy, which offers the alternatives of immediate and terrible default or more loans, which simply cannot be repaid. Of course, our 'play up and play the game' elite consistently attempt to beguile us into believing Ireland is not like Greece. But, after last week, we are entitled to wonder if the spectacle in Athens is incorporated into the German-driven ECB plan for Ireland, if we do not behave ourselves.

Last week's scenes are unlikely to enhance the chances of success when it comes to Michael Noonan's call to the patriotic instincts of Ireland's savers to spend. Our struggling Finance Minister is right to try and perk the taxpayer up but, even as he whistles, he is walking past a fiscal graveyard. And the Greek tragedy is unlikely to persuade conservative savers to refloat the economy. Instead, they are far more likely to think the minister is bluffing and move their deposits abroad before the ECB grabs their savings as well as their pensions. It would be unfair to use phrases like 'Noonan's bluff' to summarise the current strategy. The Government is working hard, but the only rising tide that can lift the stricken Irish hulk is the confidence that can only be engendered by a decisive, honest settlement of Europe's solvency crisis. Even Germany may yet find that if, like the barren age of protectionism in the 1930s, Ms Merkel turns Europe into a fiscal desert to protect Germany's interests, her companies will have nowhere to export to.

Just as free trade was once the rallying point of socio-economic liberation, resolving the banking crisis is Europe's only road out of this mess. If Ms Merkel is looking for a case study to back this thesis she need go no further than Ireland to witness the consequences of the current Malthusian banking policies. As our growing, young population comes to maturity, it is time for our leaders to confront Ms Merkel and the ECB and ask if they really believe turning this country into the fiscal equivalent of an Indian reservation is a legacy they can be proud of.

Sunday Independent

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