One ought to be careful in writing anything about the Greek crisis, because the mercurial temperament of the prime minister of Greece, Mr Tsipras, seems to permit him to change his mind at least twice a day.
However, this has not stopped all sorts of economists – some even with Nobel Prizes – from offering us their theories, most of them sadly removed from reality, so I will stick my neck out and make a prediction – those Greeks who can afford to go home to vote in the districts where they are registered, on Sunday, (and many cannot) will vote ‘Yes’ to the rather abstruse question on their ballot papers:
“REFERENDUM of the 5th July 2015
Should the plan of agreement be accepted which was submitted by the European Union the European Central Bank and the International Monetary Fund in the Eurogroup of 25.06.2015 and comprises of two parts, which constitute their unified proposal?
The first document is entitled “Reforms for the completion of the current program and beyond” and the second “Preliminary debt sustainability analysis”
NOT ACCEPTED / NO
ACCEPTED / YES
Greeks don’t trust each other much, which is why there is no Greek P&I Club. The average Greek dislikes the proposals, but she or he dislikes the idea of returning to a currency organised and controlled by fellow Greeks even more, so it will be a YES.
Mr Tsipras says he will resign if he does not get a ‘No’. Maybe he will, maybe he won’t, but for sure, nobody in the IMF, the European Central Bank or the European Union or anywhere else will pay him any attention. His credibility has, like the deadline, expired.
Predictably, Mr Tsipras has been trying to blackmail Europe by implicitly threatening to secede from the EU and from NATO and go over to the East… conveniently forgetting that Turkey is a NATO member.
Mr Tsipras has been to see Mr Putin.
Mr Putin has problems of his own, with $630bn of debt owed by Russian companies and $360bn in reserves, down from $498bn last year. Mr Putin won’t help, and Mr Tsipras, having made a fine speech about the two nations and their shared orthodox Christianity, returned empty handed.
Mr Tsipras should perhaps have got on a plane to Beijing, instead, you say? AIIB, and all that? The New Silk Road, and all that?
Famously, a Chinese company has invested in the Port of Piraeus. The Chinese Navy even paid a visit in February, and more fine speeches, mentioning Silk Roads and eternal friendship, were made. China, which is not short of a few billion dollars, is not run by stupid people, and China invested just $100m in Greek treasury bills.
Greece had been so keen to welcome Chinese investment that it broke the EU rules on state aid, and now the Chinese company has to pay Greece back… be it noted that this occurred under the last Greek government and it was the Greek Socialists, then in opposition, who started the case when they reported the Greek government to directorate general IV of the commission.
Greece has only two significant sources of foreign exchange – shipping and tourism. Greece makes nothing that anyone wants, and its productivity is so dire that its wage costs are absurdly uncompetitive.
Greek shipping is barely resident in the country at all and it was Greek shipowners who started the practice, now universal amongst shipowners, of negotiating deals with governments so as not to pay taxes. The only other business of any importance is tourism, and tourists have all said to themselves, “If Greece leaves the Euro and reverts to the Drachma, which will devalue at once, my holiday will get cheaper – what’s not to like about that?”
Greece amounts to 2% of Europe’s GDP. It actually doesn’t matter. Predictions that if Greece leaves the Euro, Portugal, Spain and Italy will be subjected to speculative attacks and forced out in turn ignore the real improvements that these nations have made – Ireland, indeed, has made a full recovery. The truth is that Greece was recovering, before it elected a government of teenagers.
Yes, Greece needs to reform its absurd pension system – a system created by each trade union in turn demanding an ever earlier retirement age, each pension fund in turn saying “we can’t fund this!” and the government saying to each pension fund “We will bail you out!”. Greece needs to start collecting taxes, and doing away with the Levantine nonsense, found also in the Yemen, of not taxing ‘unfinished’ properties.
What the Greek prime minister and finance minister Yanis Varoufakis are finding out, rather late, is that nobody really cares. Like the little girl who cried “Wolf!”, nobody is listening to Greece any more.
The moral is “Don’t elect a bunch of kids to do a grown up’s job”. This is not an argument about “democracy”, or about the dreadfulness of those awkward Germans (and Finns, and Dutchmen, and anyone else North of the Alps and in the Eurozone) who think that people ought to pay their bills.
The Greeks will vote ‘Yes’, sack their silly government, start paying taxes, and get on with life. Alexis Tsipras will join Arthur Scargill and Che Guevara in the Museum of Political Irrelevance. Space is reserved for Vladimir Putin…