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Blowin’ in the Wind

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“Yes, ‘n’ how many years can some people exist
before they’re allowed to be free?”

“Yes, ‘n’ how many ears must one man have
before he can hear people cry?”

Bob Dylan’s words were written in 1962 when he was involved in the anti-war and protest movement of the time.

These words are equally relevant to the Greek tragedy evolving out of their financial crisis. There is no doubt that Greece is, in many ways, a victim of its own previous governments for even joining the Euro and the vanity of the authors of the one currency project. No one can dispute that their economy is a shambles (and has been for many years) and that the cuts imposed upon them as part of the well intentioned “recovery package” were an attempt to address the vast overspending, which has resulted in borrowing heading towards double their GDP.

Now, after long nights of discussion and negotiation there is an offer on the table. But what an offer!! No trust and Greece has to go back and get approval from the parliament for terms that are eye wateringly brutal. Yes, we all know that this is reality and the past bailouts have been treated too lightly, but this is total humiliation, these are terms of surrender. Though the recent referendum rejected the austerity package, there was a voice within Greece that made it clear that the majority of the Greek people wanted to stay within the Eurozone. Even Alexis Tsipras, the Greek PM, made it clear that he wanted to stay within the Euro and now he knows the price to do this, as do the Greek people.

Will they pay the price? Are they effectively giving up their national sovereignty? Will the humiliation of being told that there is no trust and that before they get a cent of bailout they have to pass legislation to change their financial landscape be too much? And only then the €86 billion will be dripped out to them over the coming years, with no write off of debts.

Alongside this €50 billion of government assets have to be transferred to a fund out of the reach of their government to be sold on to the circling financial sharks to help fund their future. It will be regretted that no one was as brutally realistic when the fantasy of the Euro was conceived, as the current pain and ill will might have been avoided.

“Yes, ‘n’ how many years can some people exist
before they’re allowed to be free?”

The austerity packages imposed on the Greeks have already inflicted almost five years of hell on the Greek people and now there is a certainty of another three years before this package (if accepted) runs out. But what then? The improvement needed in the economy to lift the heavy burden being imposed is equivalent to moving from the Stone Age to the 21st century, and in just 3 years. Perhaps mission impossible might be an appropriate description of the commitment. In three years are we going to see exactly the same scenario? Are the Greeks going to be permanently in the last chance saloon?

Whether the Greek parliament accepts these terms and conditions, is in the lap of the gods that reside up on Mount Olympus, but rejection will almost certainly result in Grexit and the consequences of that are being sold as being worse than what as being offered. Talk of “humanitarian aid” is short hand for a complete collapse of not only the government, but also the fabric of society.

The crisis has so far lasted throughout the year and may run on into the autumn. Selfishly it has taken the EU’s attention off our issues with them, relegated to next year’s problem, which seems to be the way that the EU works. So does the way in which this crisis has been handled tell us anything about how the UK’s negotiations are going to go?

Self-interest is important. The current deal allows for no “haircut” or write off of current debts and the IMF will not be taking part. The exposure of certainly the Germans and the French to the Greek government borrowing is mind blowing and they certainly are not prepared to take a hit. So the terms of this offer is designed to keep the advances to date on the books, with no write off or relief. Despite the boasts about the unity of the EU it is apparent that national interest comes first.

Get a deal today and worry about the future when it hits the headlines. The Greek deal is for three years but no one either seems to worry about the Greek people or what will happen at the end of those three years. The overseas fund set up with national assets, one suspects, will be used to repay those who shout the loudest and as security for the borrowing. In the Euro is Greece a viable entity? Though there would have been short-term pain, the writing off of liabilities by an effective devaluation would hurt others, but in the medium-term may have rescued the Greeks. Think of how many other countries have bitten the bullet and devalued when hyperinflation has hit their economies.

“Beware of Greeks bearing gifts” has been often quoted but we could just as easily say, “Beware of the EU making an offer” and that has to be our mantra when negotiating for ourselves and however bleak the alternative might be viewed (such as coming out of the EU for us) we must seriously and honestly consider it. The EU countries are brutal negotiators, driven by self-interest and the vision of a great project and they will take no prisoners as the Greeks are learning.

In all of this, spare a thought for the Greek people buffeted by the whims of the EU and wonder whether the bureaucrats in Brussels ever listened to Bob Dylan.

“Yes, ‘n’ how many ears must one man have
before he can hear people cry?”

David Ingall

Past President

UK200 Group

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