Saturday, 12 May 2012

The result of last elections in Greece is all Greek!

The choice in front of the electorate ought to have been clear.  Fish or foul? 

Do Greeks want to stay in the Euro and adopt the tough austerity programme which unavoidably comes along a financial rescue package involving debt forgiveness of more than one hundred billion Euros or do they prefer to exit the Euro and go their way and solve the problem without external support?

Last Sunday Greeks chose neither fish nor foul.  They chose beef.  The problem is that beef was not on the menu.   They chose to stay in the Euro but they also voted against the austerity programmes without which they cannot stay in the Euro.    They chose to have the benefits without making the necessary sacrifices to redeem themselves as if the rest of Europe owes them a living.

Greece is crumbling like its Pantheon

I should think that being so much in pain, both physically through the austerity measures and morally seeing how their country has been bankrupted by the two major parties who re-presented themselves for re-election in favour of austerity and staying inside the Euro, the Greeks wanted to punish the two major parties and in their pain and rage have not properly considered the long term consequences of their decision.

The major fault for this lies with the leader of the New Democracy Party who insisted on fresh elections when the proper decision would have been continued support to the technical Prime Minister who could administer the tough medicine that politicians find so hard to prescribe.

What's done cannot be undone but the grave risk is that Greece will be forced to go for fresh elections as early as this June and there is no reason to think that the electorate could recover their sobriety so quickly rather than give a double kick in the pants of politicians who bankrupted them, whatever the consequences.

The prospect of Greece having to leave the Euro if such decision of the first election is re-confirmed by the second one sends shock waves to other European countries who are themselves on life support.  Not that Portugal, Ireland, Spain or Italy have problems as bad as those of Greece.  Far from it!   None of these countries has needed to ask its creditors for debt forgiveness.  Quite the contrary Spain and Ireland saw their government take responsibility for debts which truly belonged to their privately owned banking sector which had to be nationalised in the process.   But a Greece dirty exit out of the Euro could create a contagious crisis of lack of confidence and without confidence the European credit markets will freeze.

Someone should explain to the Greek electorate that the only ones that will benefit from a Greek exit of the Euro are the Greek oligarchs who corrupted their politicians, evaded their taxes, exported their capital out of the country and cannot wait for Greece to go back to the Drachma so that they can buy state assets which will have to sold under the hammer at rock bottom prices.

Greeks would do well to think beyond their current pain and anger and elect a  national government who can work their way back to national salvation while staying in the Euro.    Once Greece proves its credibility ( which is presently  a long shot, a very long shot) they will have the right credentials to ask for dilution of their austerity programmes.  But their credibility has to be rebuilt first, just as Portugal and Ireland are desperately trying to do.

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