Elvis Lives!
The Times published this trenchant critique of Alexis Tsipras and his colleagues in Syriza who seem to believe that the Greeks voting for other people to clear up their debts has some connection with fairness and democracy.
Which is nonsense, of course, just as it would make no difference to the Greek economy if a referendum were held on the proposition that Elvis is still alive or that the moon is made of green cheese.
Tsipras and his naive cronies have no one to blame but themselves
Alexis Tsipras’s call for a referendum is an act of supreme cowardice - Nicolas Koutsokostas / Demotix Images
The key exchange in the Greek crisis came when Yanis Varoufakis, the country’s narcissistic finance minister, told his fellow eurozone finance ministers that they had to accede to his government’s demands because they were those of a democratically elected administration.
It is a pity that Mr Varoufakis — who, it is obligatory to note at this stage in most articles, is an expert on game theory, even though he seems not to have the first idea of negotiations — did not heed the response he received at this moment from Wolfgang Schäuble, the German finance minister. He curtly reminded Mr Varoufakis that he and all the other eurozone finance ministers were also elected. It is a pity that Mr Varoufakis did not take that on board.
But, then, the biggest tragedy about this saga is that it was all so avoidable. It could have been avoided when, 14 years ago, at the birth of the euro, Greece had been excluded from the single currency but was admitted, according to accounts at the time, because representatives of the French government insisted: “You cannot say no to the country of Plato.”
More recently, the more avoidable disaster came when Alexis Tsipras and his ragbag coalition of superannuated Marxists, half-baked socialists and hard-core Stalinists sold Greek voters the lie that there was an alternative to the austerity to which his predecessor, Antonis Samaras, had signed up.
It must never be forgotten that, this time last year, Greece was the eurozone’s fastest-growing economy. It had begun to achieve a primary budget surplus. And, astonishingly, in April last year it had even returned to the bond market, selling €3 billion of five-year bonds with a yield of 4.95 per cent. The implied borrowing cost on those five-year bonds today — one can scarcely talk of a yield any more since the wretched things are barely tradeable — is close to 16 per cent.
Such is the cost of Syriza. The election of Mr Tsipras and his fellow jokers has set back the country’s economic recovery by many years. The moment Syriza was elected, many Greeks reverted to their previous behaviour of regarding the payment of taxes as an option. The government’s finances are back in the red. The recovery has slammed into reverse.
And for what? It does not take Pythagoras to calculate that Syriza has achieved the square root of nothing in its negotiations with its creditors in the European Central Bank, the European Commission and the International Monetary Fund. The terms on which the bailout that expires tomorrow could have been extended to the Greek government were exactly those on offer to Mr Samaras when he was ejected from office in January. So much for all those promises made by Mr Tsipras and his strutting finance minister to the Greek people. So much for that supposed expertise on game theory. It is a crying shame, and the Greek people are about to discover the true cost of putting this naive, preening rabble into power.
The probable truth is that Syriza was never interested in negotiating with its creditors. Its proposals to try to return the government to surplus almost exclusively by raising taxes on productive economic activity, rather than by reforming Greece’s sclerotic, corrupt public sector, or even at least making the gesture of asking whether all public spending was essential — as responsible governments in Spain, Portugal and Ireland have done to dig their way out of trouble — suggested that they were never really serious about doing a deal.
The latest gambit from Mr Tsipras and his ministers, to call a referendum on the bailout terms, is an act of extreme cowardice. True leadership would have involved admitting to the Greek public that there was no alternative, just as Mr Samaras did, to make a clean breast of things and apologise for having promised voters the earth, moon and stars. Instead? A referendum that puts at risk Greece’s membership of the euro. Mr Tsipras will have to resign if he loses. Instead, he is gambling that he can win, taking Greece down an even more dangerous route. It is the ultimate example of putting one’s party before one’s country.
Not that one can expect any contrition from Mr Tsipras. Now that the ECB has made clear that it will maintain its present level of lending to Greek banks, rather than make new funds available, the chances are there will be a run on Greek banks today. The logical thing for Greece to do under such circumstances would be to impose capital controls. You can bet, if that happens, Mr Tsipras will blame the ECB rather than admitting that his own actions have brought the country to this point.
Should Mr Tsipras triumph in the referendum, Grexit begins to look inevitable. But do not suppose that such an outcome would represent a panacea for Greece, as some have suggested. Greece is not a big exporter, so devaluation via a return to the drachma would not be a miracle cure for the woes of its economy. It might make its tourism sector more competitive, but that’s about it. On the flipside, the cost of imported goods would rocket, bringing unimaginable misery to ordinary Greeks.
Incredibly, comments from Mr Varoufakis to the eurogroup, published at the weekend, make clear that, should the Greek public vote next Sunday to accept the terms on offer to the government by its creditors, he and his colleagues would “do whatever it takes” to implement the agreement with the institutions. It is to be hoped that, should this come to pass, it is the last act of a Syriza administration before resigning and handing the governance of this proud country back to the grown-ups.
Ian King is business presenter for Sky News. Ian King Live is broadcast at 6.30pm Monday to Thursday
