Παρασκευή, 23 Ιουλίου, 2021

Eurogroup: “all went well”, but not for Greece

In contrast to shallow coverage of yesterday’s Eurogroup that after a half year wait finally came up with a pseudo-solution to the Greek debt crisis, not everything is as well as the local political elites will have the country believe. The fact is that the country lost its best opportunity for a clean, honorable and permanent solution to its financial woes that would have restored national respect. The victory claimed is for a political system bent on preserving itself at the expense of the real economy and national sovereignty.

An old Arab saying goes that three things cannot be taken back – an arrow that has been fired from its bow, words that have been spoken and an opportunity that has been lost. But to take an opportunity one must first believe in it and strive for it.

Despite Prime Minister Antonis Samaras soothing words that “everything went well” at the Eurogroupon Monday in reality a great opportunity was lost. It seems unlikely that the international financial and strategic balance of powers will ever again be so favorable disposed so that another chance emerges for a better more balanced solution for Greece.

The Greek government still doesn’t and never really believed in this opportunity. In fact many systemic print and media apparatchiks taking their lead from the government headquarters of Maximou Mansion wrote and said in the last couple of days that an objective determination of debt sustainability wasn’t really possible. They supported the notion that whether you set the bar at 120 billion Euro or 1 trillion Euro it was all equally meaningless and illegitimate. Therefore, the only thing Greece should care about is to get the bailout money tranche.

The bar was set low so Prime Minister Antonis Samaras could more easily jump over it. Greece may get substantial amounts of money and that should give the government a communications victory. Moreover, it has refocused the domestic agenda on scenarios for cabinet reshuffles – who will leave the government and who will come in, whether Pasok President Evangelos Venizelos will become a Deputy Prime Minister, etc. Sadly this today is being presented as an all-encompassing achievement.

It is clear a near dead political system doesn’t have the guts to put up a real fight. It continuously fails to chart long term political strategy which in the final analysis is what creates historic events. It ignores the nation’s needs and tries to do whatever it can, no matter how amateur, to buy itself a little more longevity and temporary survival. In simple words, it trades off national viability for the self-perpetuation of the political system.
From there onwards, no one seriously cares at this moment if the Greek national debt will come in at 120% of GDP or substantially lower at 110% in 2022. And what if we don’t meet those targets?

Well whoever is the prime minister in office at that quarter will come out an announce that we have signed Memorandum number 10, perhaps from the south east Mediterranean island of Kastelorizo where former PM George Papandreou declared the first Memorandum– assuming that the island will still be a part of Greek territorial sovereignty. And a prospective memorandum 10 may dictate the “utilization” of ancient archeological sites of Greece, including the Acropolis.

However on this day everyone is pleased and content not to look that forward into the future. The three parties that make up the government “saved” the country one more time, main opposition radical left Syriza party is relieved that things didn’t fall through so it won’t be called upon to actually govern any time soon. Colorful conservative New Democracy MP Adonis Georgiadis can keep selling his books on TV while far right Golden Dawn leader Michalokiakos and his wife can continue to snap up very expensive imported jewelry.

The Prime Minister statement that “all went well” means that all indeed did go well but just for the political system. The real economy of course may have a different opinion as to just how fine things are. It’s impossible to find in the terms imposed by Greece’s lenders evidence that the spiraling depression will be halted – and even les evidence that the country will return to growth.

Where is growth going to come from if future Greek governments will only have access to 70% of primary surpluses that any later budget may generate? Where is growth going to come from if the country’s means of production are auctioned in fire sales for the sole purpose of filling up the special segregated account?

Just so in the near future some politicians can’t claim they “didn’t know” what was going on, we suggest that they carefully read the following quoted paragraph from the official Eurogroup announcement.

“The reviews of the terms of the Greek program include the adoption of new tools and initiatives from Greece to reinforce the program, chiefly through corrective mechanisms to ensure the targeted public finance goals are met, the privatization revenue targets achieved and rules will be toughened considerably for compiling and overseeing budgets. Further Greece must substantially reinforce the special segregated account for the servicing of debt. Greece will have to contribute into that special account all of the revenues from privatizations, the targeted primary surpluses, as well as 30% of additional primary surpluses achieved, in line with quarterly basis for debt servicing.

Additionally, Greece must improve transparency and has to provide full information to the EFSF/ESM before hand and after for any and all transaction the special segregated account will or has engaged in.”

The Treaty of Versailles imposed after WWI on losing Germany did not contain such humiliating terms. And the result of that treaty was the fall of the Weimar Republic opening the way for Hitler.

PS. On the 28 June 1919, the then German Foreign Minister, Herman Muller, who signed the Treaty of Versailles at least had the political honor not to tell his people that “all went well.’

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