Cyprus Mail
CM Regular ColumnistOpinion

The Greek predicament

European Parliament President Martin Schulz (left) shakes hands with Greek Prime Minister Alexis Tsipras outside the Prime Minister's office in Athens

By Hermes Solomon

RECENTLY elected Prime Minister of Greece, Alexis Tsipras’ success is testimony to three things: the strategic crisis of the eurozone, the determination of the Greek elite to cling to systemic corruption, and a new way of thinking among the young.

President of the Eurogroup, Jeroen Dijsselbloem said of Greece’s predicament: “The most important thing is that if you remain in the eurozone, you stick to the rules we have.” But he forgot to mention that the European Central Bank (ECB) broke one of its cardinal rules two weeks ago, when Chairman Draghi announced quantitative easing (QE) of one trillion plus euros.

In 2010, the IMF predicted Greece would grow as the result of its aid package. Instead, the economy has shrunk by 25 per cent. Wages are down by the same amount or more. Youth unemployment stands at 60 per cent – and that is among those who are still in the country.

The economic collapse has demonstrated complete myopia among the European policy elite. In all of drama and comedy there is no figure more laughable than a rich man who does not know what he is doing. For the past four years the troika has provided Greeks with just such a spectacle.

The creditor (lender of money) in economic theory loses out when the debtor goes belly up. And this is Tsipras’ ace in the hole…

Tsipras is 40 years of age, dynamically energetic and idealistic – the most fanciful of leaders – a breath of fresh air in a stagnant Europe that has plagued the masses with its policies of unregulated loans followed by crippling austerity. And the ‘plague’ is spreading, QE or not.

Tsipras reckons he’s going to reinstate those lost 300,000 public service jobs and a minimum wage of 751 euros. He’s going to offer free healthcare, reinstate pensions and social hand-outs for three million caught ‘desperately’ in Greece’s long-term poverty trap.

And where is the money coming from? Yes, you heard him, the rich! And if Brussels taxed the rich as it does the poor then Tsipras’ promises might become reality.

As for Greek oligarchs, their misrule long predates the crisis – not only the famous shipping magnates, whose industry pays no tax, but the bosses of energy, construction groups and football clubs. They had no intention of paying taxes when the troika ‘finally’ demanded Greece balance the books after 2010, which is why the burden fell on those trapped in the PAYE system – a workforce of 3.5 million that fell during the crisis to just 2.5 million.

Colossal companies moved their registered offices out of Greece to tax havens. Bring them all back Tsipras is saying, given that Jean Claude Juncker, president of the European Commission ‘knows’ all about tax havens.

Tsipras must first sweep clean Greece’s inefficient, wasteful and corrupt bureaucracy. Mind you, who’s buttering their bread at taxpayers’ expense more than MEPs, with a Brussels admin of over 300,000 ‘unproductive’ personnel and a wage bill that makes nonsense of Tsipras’ demands?

Just how did AlexisTsipras become leader of the far Left? He was ‘captivated’ by his partner of more than 20 years, radical Betty Batziana, who convinced him to join the Communist Youth Movement in 1990. Only when he became leader of SYRIZA did he remove a poster of Che Guevara from his office wall; the couple middle-naming one of their two children Ernesto. Not surprising that the ambassadors first invited to visit him this week was the Russian followed by the Chinese.

Ever since 1976 Greece was systematically ripping off EU funds. EU reaction was that this was an internal matter for Greece and the EU could not interfere or Brussels would be accused of being an accessory after the fact.

Solving indebtedness is a battle between Keynesians, who stimulate economies by ‘throwing money from helicopters’ at purchasers of new goods, and the Austrian School of tight asses, who want debts repaid pdq by reducing spending and imposing draconian austerity measures. The former leads to a misplaced sense of happiness followed by the latter, despair – people committing suicide or dying from cold and misery – unable to climb six flights of stairs to where the dispensary of the hospital has been intentionally located. Schools and kindergartens close, schoolchildren faint in classrooms, etc.

When Golden Dawn emerged as a frightening, violent neo-Nazi force, what struck the networked youth was how many of the political elite and big businessmen pandered to it, craving for order.

If the Germans play too tough with Greece, let’s hope they remember what happened between the wars, when the Versailles Treaty squeezed the orange until the pips squeaked; Weimar debts were inflated away and Hitler came out from under the carpet.

Media headline ‘Euro crashes to nine-year low on ‘Grexit’ fears’ was EU propagandist misinformation. The euro began its decline as soon as Draghi hinted at QE, and collapsed thereafter.

“We call for the restructuring of the debt so that it can be serviced in a socially viable way,” said Tsipras. But his plan includes erasing much of the debt.

If Greece wins that erasing of debt favour, then why not give way to other debtor nations?

Tsipras must face harsh realities. The most immediate is that Greek banks are being kept afloat by the European Central Bank. If the ECB were to end that liquidity, every ATM in Greece would run dry tomorrow and the entire banking sector collapse.

And watch out; the trusted and well tried “Cyprus Bail-in” may also visit banks in Italy, Spain and Portugal as well as Greece.

The Greek electorate, above all the young, are usurped when oligarchy, corruption and elite politics stifle meritocracy. They are signalling they’ve had enough of elites both in Greece and Brussels.

Could Tsipras emulate Greek 1940s dictator, Metaxas by saying ‘Ochi’ to Brussels authoritarianism or will he be ‘eliminated’ like his hero, Che? He never wears a necktie or crosses himself at Orthodox ceremonies – a man who refuses to conform to what he regards as hypocritical social etiquette of a corrupt bourgeoisie, though he was himself born into a bourgeois family.

If Tsipras gives way, the next violent protests in Syntagma Square could be directed at him and leave the way clear for Golden Dawn (and big business) dragging on their leashes to restore ‘the old order and racial purity’.

We face two years of electoral uncertainty in Europe, with the far left or the hard right now vying for power in Spain, France and the Netherlands.

Nigel Farage, leader of UKIP wants out of Europe and Tsipras has got Brussels worried; he might be seen as the forerunner of a Europe-wide movement against plutocracy, excessive bureaucracy and kleptocracy or ‘kicked down the stairs’ by those who pretend to want to resolve the Greek crisis yet secretly shoot arrows into his heels.

Some are describing his cabinet of ‘extremists’ as ‘the Wild Bunch’, many unpaid with or without portfolios. Could a similar leader and cabinet ever take over in Cyprus? We’ll see after the troika foreclosures bill is passed and our ‘banksters’ pursue unchecked their merciless rout of indebted homeowners and SMEs yet leave our corrupt elite untouched.

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