Greece on its knees

POOR Greece. This country, which has done so immensely much for Western civilization, is presently sinking away in a morass of incompetence, corruption, lack of work ethics and ideological stubborness.

It is very dangerous to predict the unpredictable in international politics. But, with the proviso that I may be happily be proved wrong, it seems as if Greece is inexorably on its way to exit the eurozone – the dreaded “Grexit” which has been looming over the country ever since the left-wing government of Prime Minister Alexis Tsipras took over last year.

Tsipras (and especially his minister of finance, Yannis Varoufakis) seems to have been a disastrous – if understandable – choice of the Greek voters. They had been through a torrid time, with drastic budget cuts, which had brought the country’s economy all but to its knees.

This was a condition by the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) to bail out Greece’s looming bankruptcy. After all, voters in the rest of the EU were complaining ever more loudly that their tax money were being thrown down a bottomless Greek pit, and that they would never see it back again.

Tsipras was elected on the basis of his promises that he would stop the disastrous budget cuts, that he would restore the endless stream of state milk and honey to which the Greeks felt they were entitled. But his European counterparts very soon made it plain to him that they were not about to take his nonsense, that he had to reform his economy pretty fast and take the concomitant pain in order to put his country over time on a solid footing again.

Thus Tsipras, a committed Marxist, had to balance precariously between his own election promises and the cold world out there. His strategy, therefore, was to win time, appeasing his European partners by making vague promises – and then doing very little.
This strategy was bound to fail.

And fail it did, disastrously, in the Latvian capital of Riga last week, when the eurozone Finance Ministers came together for a summit. Varoufakis, who used to be a professor of economics and by all accounts a very arrogant man, tried to bulldoze the other 18 colleagues by what he considered to be his superior understanding of the matter at hand.

It backfired completely. Finally the others decided they had enough of this arrogant upstart. With Slovakian Finance Minister Peter Kazimir leading the charge, they accused him of being a “time waster” and told him he would never get anywhere with his hautain demeanour. They basically sent him packing.

True to his character, Varoufakis remained unrepentant. He tweeted a quote by the late American President Franklin D. Roosevelt from 1936: “They are unanimous in their hatred for me, and I welcome their hatred.” Whereby he basically told Europe to stuff itself.

Afterwards, Dutch Finance Minister Jeroen Dijsselbloem, who is also chairperson of the Eurozone Group, told reporters that the group remained willing to help Greece, but not nearly by as much as it was demanding.

Greece has already received €240bn from the EU, the IMF and the ECB. It wants another €7.2bn. It needs this money urgently to pay its bills, among them an interest payment of €200m which will have to be paid by Saturday, and another €750m by 12 May.

So, Greece is not in a strong negotiation position, to put it mildly. No wonder that Tsipras, who is not quite as arrogant as his Finance Minister, has decided to ditch Varoufakis as his chief negotiator with the EU, and replace him with an Oxford-educated economist, Euclid Tsakalotos.

To be sure, Tsakalotos also describes himself as a Marxist, but he has a reputation of being much more amenable and easy-going. He will not ruffle as many feathers as Varoufakis did.

In a long television interview, Tsipras expressed optimism that his government would reach a compromise with the EU – a sentiment not shared in Brussels or any of the other EU capitals. Especially countries like Spain and Portugal, who had to go through similar painful periods, were scathing in their commentary about what they described as Greek intransigence.

The irony is that the Greek economy was just showing tentative signs of recovery when Tsipras came into power. Those signs have been swept away.

There is a fear in Europe that Greece will do a deal with Russia and drift away from the EU and Nato. Having a strategic location, this will cause considerable problems. However, others think Russia, also in considerable economic trouble, will not be able to carry Greece on its shoulders, and that this danger will soon pass.

As things stand now, Greece is thundering towards the precipice of a Grexit. This will have some advantages, as the drachma can immediately be devalued, making Greece products cheaper internationally.

But for a country also importing much, many products will become even more expensive. The consensus right now is that a Grexit will hurt the EU economy to a limited extent, but that it will be disastrous for Greece.

And the real Greek tragedy is that they will have only themselves to thank.