So the ECB has agreed to raise its limit on emergency loans to Greek lenders by a further €900m over one week. And acting on the assumption Greece will stay in the Euro, the plan was finalized to provide a €7bn bridging loan to avoid a default on Monday. In response, the Tsipras government has caved in over EU’s insistence on more austerity – tax up, pensions down. So Eurozone finance ministers have agreed to talk about an €86bn rescue package.
What does it all mean?
Instead of beating Greece to death for not repaying its recklessly granted debts, the plan is to continue strangulation with the faint possibility that at some stage before expiry, the shortage of oxygen might be noticed. So, no change there then! But at least the banks will reopen, the sun will shine, and Greece will still be a great place to go despite the enforced austerity.
Jason Manolopoulos made the point in his account of ‘Greece’s odious debt’, that EU politicians should have been far more diligent in assessing Greece’s compliance with the Maastricht Treaty convergence criteria, before ushering her into the Euro. Instead, they appear to have been pursuing their own self-importance in targeting the Euro as dollar partner in a bipolar global monetary system.
There are clearly a lot of things wrong with the way the Greek economy works, whether or not they are in the Eurozone. Manolopoulos described the economy in some numbers. 321 dead individuals over 100 still receiving pensions. 16,974 residential swimming pools in northern Athens detected by satellite photography; 324 householders in Northern Athens declaring for tax purposes they own a swimming pool. 53 years since Lake Kopais was drained, but office to manage the lake’s affairs still staffed by 30 full time civil servants. And so on.
Manolopoulos identified cronyism, statism, nepotism, clientelism, corruption, closed shops, red tape and waste as categories of the problem. He identifies a score of infamous fraud scandals, some of which involve the world’s leading criminal banks such as JP Morgan, as well as global corporates. He retells the story of a constituent asking his MP for help in getting a position for his son. The MP investigates and comes up with two possible jobs, whereon the constituent replies angily “I didn’t ask you for work. I asked for an appointment.”
It is difficult to disagree with Manolopoulos’s broad conclusion that Greece never came near to meeting the convergence criteria for joining the Euro. And it will never come near to repaying its debts. A start could be made on resuscitation by the Greek government cleaning up its act and the Eurozone responding by accepting its earlier mistakes and reducing the resulting burden.
It might have been hoped that the Syriza government would have taken that initiative, starting with the political elite. By so gaining the population’s respect, its cleanup might have been more successful than ever expected. But by its compromise with the ECB, so isolating 38 of its own MPs, including ex finance minister Varoufakis, Syriza may have passed up its best opportunity for decisive action.
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Contact Maria Kelepouri, MBA, Tel:+30 6976 781 651 or Email firstname.lastname@example.org