This massive “bail-out” is intended to save the eurozone, not the Greeks
Germany’s role in imposing what many think are punitive conditions on Greece for the latest supposed “bailout” of the Greek economy has led to huge anger against Germany on the streets of Athens and—to the bewilderment of the Germans—comparisons with the behaviour of the Nazis, who occupied Greece in 1941 (causing the deaths of over 300,000 civilians from starvation in Athens alone, and tens of thousands more through Nazi reprisals, and leaving country’s economy in ruins). It hardly needs to be said that these accusations are grossly unjust. Have a look at this:
Greeks brand Germans ‘Nazis’ for driving through painful cuts and ‘taking control of their economy’
• Protesters burn German flags and depict Merkel in Nazi uniform
• Anger at Germans who ‘keep changing rules for bailout money’
Greek anger with the way they believe Germany has taken over their economy is boiling over on the country’s streets.
In recent days, protesters have burned German flags and defaced the Bank of Greece’s headquarters to make it look like the Bank of Berlin.
German chancellor Angela Merkel has also been depicted in Nazi uniform on the front page of right-wing newspaper Democracy above a headline alluding to Auschwitz.
The backlash has been provoked by Germany’s role in driving through painful measures to stop Greece’s debt crisis from spiralling even further out of control.
Of course, it’s all nonsense. The Germans really don’t want to take control of Greece or of anything else. In a way, that’s the trouble: the Germans are so sensitive about their past that they have in the past shrunk away from exercising a leadership role even when it would have been appropriate. So they are shocked by these accusations, and at the anger against them for (so far as they are concerned) saving the Greeks from the result of their own irresponsibility.
The Germans, however, have brought this Greek anger on themselves: for, the fact is that the Greeks are right to think that there is absolutely nothing in this latest “bail-out” that will do anything but lead them deeper into debt and make their own economic recovery even more unlikely than it is already. This is where a little German self-examination would be appropriate: for what they are really doing now is not saving Greece at all: it is saving the eurozone banks who so foolishly lent the Greeks such huge sums of money when they adopted the euro as their currency, without any thought of how they were ever to repay it. The eurozone is directly responsible for the plight of the Greeks, by letting them in in the first place.
The vast sums of money it is now handing over will leave Greece almost immediately: the Greeks will get no benefit from any of it. Greece will have to repay it: but the purpose of the loan, I repeat, is to save not the Greeks but the eurozone and its banks.
An individual who is so heavily indebted that he can never repay his debts has two paths open to him: if he is foolish, he will get even deeper into debt (the path now being imposed on the Greeks); if he is sensible, he will declare his bankruptcy. This will lead to a period of hardship: but it will at least allow a fresh start, and he will be able to rebuild his life. Giving Greece another “bail-out” is like giving a man heavily in debt yet another credit card.
I have seen only one analysis of the situation of Greece and of the treatment now being meted out to her (and the real motives behind it) which looks at all near to what seems, to me, to be the reality; it was written by Matthew Parris, and it appeared in the Times newspaper on Saturday. Since the Times isn’t online except to subscribers, I can’t give a link, so will quote at some length:
The mass of the Greek people are the victims … We British would also take early retirement on inflated pensions if this were offered to us by corrupt political parties whose venality Brussels had for years underwritten, and to which the EU had always turned a blind eye.
It follows that any concerted, German-led European action that starts to look like a project for beating up and humiliating an entire people will take the flavour of injustice, monstrous injustice.
Since the fall of the Berlin Wall few nations have been trashed with anything like this violence. All week the news has been full of reports and images of deprivation and despair. I will not repeat statistics that are now common currency: the numbers demonstrate the sheer speed and depth of Greece’s descent into bankruptcy and the national shock this is causing. It is far worse than anything outside war that has happened to us British over the last century.
Our own democracy would be in danger today if we were being asked to take half the pain now being inflicted on Greece. I can already hear the German answer. “We are doing nothing,” Berlin would say, “to hurt the Greek people. On the contrary we and the rest of the eurozone are offering to rescue them from problems of their own making. We are being asked to part with a great deal of money. We are simply making conditions.”
Three things are wrong with this argument. First, it suppresses the most important consideration behind northern European policy towards Greece. The policy is not primarily philanthropic, but designed to shore up a common currency and European banking system from which the stronger European economies derive great advantage.
Second, if, without demur, the richer members of a partnership connive over many years in the descent of a junior partner to a dependence on subsidy that resembles drug-addiction, there arises a responsibility, including a moral responsibility, to help the patient out of his addiction in a way that is gradual enough not to kill him. There is only one word for what Berlin and Brussels are doing, and that is “brutal”.
What then should now happen? Heaven knows, I’m no economist. But so what? Professor Dawkins says that you shouldn’t believe anything that can’t be proved: well, that may not be true of religious belief, but it certainly seems to apply to much, if not most, economic theory. And since economists are just as confused about all this as anyone else, why shouldn’t a non-economist suggest his own solution, based merely on what seems to him common sense?
What Greece needs, it seems to me – among much else, including a clean-up of political corruption – is an orderly default on her debts, followed by some kind of Marshall plan (at least we know that worked). As for the eurozone (which the Greeks should leave immediately) that should be shored up by handing over the “bail-out” money just agreed in Brussels not to Greece but direct to the bankers whose loans are now due to be repaid, in order to protect them from collapse: but, as with the Royal Bank of Scotland, that should involve a partial transfer of ownership pending an eventual repayment of these huge sums, not by Greece but by the banks who foolishly lent them so much money.
Meanwhile, the Germans should have a good hard look at their own behaviour. As Matthew Parris puts it: “Do the rest of us not feel a shudder of distaste at the insistence that Greece’s elected politicians sign personal declarations about what manifestos they will, or will not, offer their own electorate in their own general election? …. how tin-eared do you have to be to miss the note it will strike among a population some of whom are actually running out of food?” Parris is right: this is not cautious and sensible, as the Germans appear to think it is: it is simply brutal. Greek democracy is presently in a delicate, not to say positively unstable condition: do the Germans really want positively, once more, actually to destroy it?