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In the next few days we would know the exact timetable of when the
Troika is going to release the 44 or so billion to Greece. Just as a reminder
this is the money that Greece was supposed to get right after a successful PSI
and implementation of reforms plus the next two installments. The delay was due to the unnecessary double
elections that were caused by Mr Samaras (4th PM since 2010) in his
efforts to put the premiership on his otherwise lame and vacuous CV. There is no doubt that Greece is going to get
this money perhaps with some more strings attached to it.
Would this money be enough to save Greece? Would this money be
enough to save the coalition government in Athens and Mr Samaras? These are
some of the questions that are being asked. Let us ponder for a while.
Would this money be
enough to save Greece?
This is a typical question that many repeat every day. It has many
variants, like “can Greece be saved”, “would Greece leave the Eurozone” etc. In
my humble opinion a more fundamental question should be asked, and that is
“What exactly is worth saving?” Unless this is defined and answered money and
possibly lives would be wasted. Reading the published, and detailed plan that Troika
has for Greece and the actions that it recommends/enforces one gets the feeling
that a whole new country is being built. There is hardly any Greek institution
or side that is in no need of a total reform or scraping. In fact, if anyone
wants to create a new country from scratch it has the perfect blueprint in the
reports produced by the EU and the IMF. It is mindboggling. The level of detail
and the actions recommended are unprecedented whether it is the economy, the
labor market, the health service or education.
In other words, the Troika plan implicitly but unequivocally answers
the question “What exactly is worth saving?” There is nothing worth saving
from the old Greece. Everything includes the political ruling
class. But this is harder to do. So far they managed to kill PASOK and the next
in line is the conservative party (ND) and no doubt the left (SYRIZA) would
also suffer the same fate. Changing everything
or jump starting a country is not an easy job. In order to do so you need at
least two prerequisites. First you must have the support of the people and
second there must be a political party capable of inspiring the people and the
country to change. None of these two conditions are present in Greece. All the
parliamentary parties are against the reforms but vote for them because they
want to get the money from Europe. It is no wonder that people feel mistreated,
betrayed or occupied by some malign European power or believe in conspiracy
theories.
So, the money that the Eurogroup would release is not going to save
Greece. They are just buying some more time.
Would this money be
enough to save the coalition government in Athens and Mr Samaras?
The triple coalition government in Athens is ostensibly very fragile
and this is perhaps its biggest strength. Every member of the coalition knows
that causing elections is equivalent to political death. The left party
(SYRIZA) would in all probability be the clear winner with the possibility of the
Nazi party being third or even second if things get out of hand. This is a very
powerful incentive for the coalition members not to leave the government. Their
only hope is to keep getting the money from Europe and try to find a window of
opportunity to make a graceful exit.
Conundrum
Herein lies the conundrum. In
order for Greece to get out of the hole and rejoin Europe a new pro-European
political power is needed that does not carry the sins of the past. But any
political change currently passes through SYRIZA. There is no new center party
capable of picking up the pieces and holding the country together. Put simply,
the danger is in the transition. If SYRIZA does not quickly transform itself to
a pro-European, Troika friendly force then all possibilities are open. Leaving
the Eurozone for example may, by that time, be a very benign outcome. Leaving
Europe altogether and becoming a divided failed state is not improbable.
This brings a second realization into light. Greece does not have
rooted institutions that can guarantee a smooth political transition at times
of stress. Democracy in Greece is malfunctioning for many years now as is
capitalism and the free market. History is not very encouraging. Most of the
political changes happened through catastrophical events (1922 war, 1946-49
Civil war, 1967 Junta, 1974 Cyprus invasion and division). It is exactly for
this reason, that in 1979 the then PM Karamanlis forced Greece into the EEC
(European Economic Community, the predecessor of EU) against fierce opposition
from the left (PASOK and Communist). His overriding reason was political
stability through Europe’s institutions and not economic. Unfortunately, events
have turned otherwise.
So, Europe would have to keep on supporting the coalition till SYRIZA
bows or till a new party claims the center of politics.
Greece is fast approaching the endgame. By endgame I mean a big
paradigm change not the end of Greece. No-one can predict how events would
unfold simply because the players and the unknowns are too many. For example,
could a rise in tensions in the Middle East change once again the geopolitical
weight of Greece? Would the people of Greece tolerate a harsh winter of
discontent? The next year would probably be a make or break for Greece. The hope
that the Greek problem is going to be solved once and for all by a Eurogroup
summit, this or next week is simply laughable.
No spat between Lagarde and Schauble can resolve the realities on the
ground.
