4 July 2015

The disgraceful humiliation of Greece shames Europe


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There is a moment in a serious crisis when the question of blame becomes almost secondary, although ultimately blame is still relevant. We are at that moment now in relation to Greece, as pensioners weep outside banks and the shortage of essential drugs in the country’s hospitals, which was already a cause of grave concern, becomes critical. Ahead of Sunday’s referendum, the Greek economy is shutting down, the banks are running out of money and the vulnerable are without the funds to feed themselves and their families.

These are humiliating scenes – happening in Europe! – which shame the European Union and make a mockery of the German Chancellor’s unfounded reputation as a great leader.

Of course, historians will argue over the causes of this emergency for decades to come. Was it the direct fault of the Greek Marxists and their interesting negotiating style or does the origin of the disaster lie further back than that? Who forced Greece to borrow and spend all that money in the first place?

The robust view, used to be – broadly – my take. If you run up the debts you must pay them, of course. Live within your means and all that. As one of the City of London’s leading figures put it to me the other day at lunch: “Come on, the Greeks have been taking the p*** recently.”

But as the crisis has deepened, and the human misery involved has increased, I have come to see it differently, as a failure of European leadership, arrogance and cowardice with enormous human costs.

‎While German newspapers bluster about the need to nail Greece to the floor because of its debt transgressions, it seems to be forgotten that Germany’s revival after the Second World War was underpinned by massive American aid while victors such as the UK were crippled for decades by the cost of defeating the Nazis. Goodness, the Greek finance minister was even one of those who signed a debt forgiveness agreement in 1953 getting Germany of the hook after an earlier elected government had trashed Europe and murdered millions. In such circumstances, a little humility from the Germans and the rest of the European ‎Establishment might be in order.

Instead, the financial and political elite has behaved appallingly towards the Greeks. There was that bailout five years ago which was really a bailout of banks in other countries, such as Germany, where greedy institutions had lent money to Greece. It is estimated that 90% of the funds went to banks to pay banks elsewhere in Europe and only 10% of the money went to the Greek government to organise reform.

Is it any wonder that after this the Greeks elected a government – no matter how deluded – that said “enough is enough”?

‎The behaviour of the Eurozone and the EU in the face of these developments has been truly appalling. Although Greece has a debt of more 320bn Euros, Merkel talks in laughable clichés about European strength. The most powerful woman in Europe seems incapable of confronting reality or realising that the European project as currently constituted is done for.

Surely there is no point to this grand construct and all that high blown rhetoric about Eurozone unity if it ends up with Greek pensioners and the unemployed begging for money as their country collapses? It is as though they are being taught some sick lesson, by the deluded people who defend the idiotic construct – the Euro – that got the EU into this mess.

The lesson is surely is that the EU, if it need exist, should be a simple construct facilitating free trade and good relations across the continent. Other than that nations should be free to run their affairs. Is it too much to hope that after the Greek crisis, Europe’s leaders wake up and realise the unworkability of the current arrangements in a continent that badly needs growth, innovation and capitalism?

Elsewhere on CapX this week we tackled all manner of subjects. My pick of the five pieces of the week is below.

I can also announce the winner of our letter of the month. Not only does Lord Howell have the single best story about journalism and President Kennedy – which I must get him to write for us one day – he also writes incisive letters. He wins a good bottle of wine from me.‎ Write in at the end of our exclusive stories for the right to be considered this month.

This week we also celebrated our first birthday. Thank you to all of you who‎ read or support CapX. We are excited about the possibilities and we have expansion plans. Please let us know what you would like to see more of on CapX.

Iain Martin is Editor of CapX