By Roger Cohen, New York Times
Trying to save Greece has become an exercise in the absurd. Greece is near-enough bankrupt. Most Greeks know that. It can never repay its debts, no matter how many deals with creditors are pulled out of a hat.
The country is now run by a radical left party whose ministers have close to zero executive experience. Their executive experience nonetheless exceeds their diplomatic experience. This stands at less than zero — and it shows. The party, Syriza, includes people who want to re-fight the Greek Civil War (1946-49) in the belief the Communists will triumph this time.
For now, the party’s main enemies are international creditors and of course the Germans, who want the Greeks to present a plan of some sort to balance their books before doling out more cash — about $8 billion in fact — as part of an enormous bailout program. The thing is, however, that Syriza was elected precisely to say foreign-imposed austerity had already done enough damage to Greece.
The country, which desperately needs the $8 billion, is drowning under a welter of statistics that present a devastating picture of unemployment, unpayable pensions, youthful pensioners, uncollected taxes, drastic fiscal adjustments, and of course debt. Given all this, Alexis Tsipras, the prime minister, declared the latest proposals from creditors “absurd” — you see what I mean about diplomacy — a view that reportedly caused Jean-Claude Juncker, the chief executive of the European Union, not to pick up a call from Tsipras over the weekend.
There’s one thing about reality: It tends to come back and kick you in the teeth. Forcing Greece and Germany to coexist in a currency union will always be an exercise in smoke and mirrors. Their economies are mismatched, their temperaments even more so.
Many Greeks are awaiting the worst. The rich, of course, already have their money elsewhere. Just about everyone has a few thousand euros stashed away — 5,000 per person where possible. Stores are taking out anti-looting insurance. Public hospitals are making contingency plans for operating when money dries up. More than $5 billion was pulled from bank accounts in April alone by companies and individuals.
Speculation is rampant — absent a debt deal — of a bank run, capital controls and the issue of i.o.u.’s (that will promptly lose 50 percent of their nominal value, especially if adorned with the face of Finance Minister Yanis Varoufakis). Shortly thereafter follow economic collapse, unrest and new elections.
That sounds terrible, but I’m not sure. It would represent reality rather than the repetitive evasion of it. Things are very bad here. But just how bad is not clear because it has not been fully tested. The surface has a way of glimmering.
The Greek bailouts have given time to other countries in the eurozone — including Italy, Spain, Portugal and Ireland — to either get their houses in order or embark seriously on the task. Euro-unraveling contagion is now far less likely. One thing is sure: If a deal is reached with Greece, it will only be the prelude to the next crisis in a few months or so.
Creditors could tell Syriza: You have a century to repay the debt, but now you’re on your own. Fix the country, whether inside the euro or out. Get foreign corporations to put their money in Greece. You want to try the Putin route, with Gazprom stepping in for the I.M.F., go for it! We’re off your back now — so find a way to make Greeks believe in Greece again without the ready excuse that Berlin, or the International Monetary Fund or the European Commission is to blame.
The European Union has done its healing work here. There will not be another civil war, come what may. The sun will still shine; a gazillion islands will still delight; Greeks will still curse every form of authority; they will still smoke in every restaurant in defiance of the law; they will still have more money than they appear to have; tables in cheap “tavernas” will still offer views that have no price. A Greek meltdown is not the same as a Slovakian meltdown. Life is not just.
So many mistakes have been made. They began with the sentimental illusion that the cradle of Western civilization was also an economy competitive enough to join the euro. It was not. Then came all the easy credit handed out in the era when the view was that risk had ceased to exist. The inevitable Greek implosion was followed by austerity measures whose symbol was Germany. These failed to offer Greeks a positive vision of what all the sacrifice might produce. The consequent anger created Syriza and its election victory and incoherent promises of a new way forward. Everyone is now caught in the web of their own contradictions.
More of the same might gain a few months. It will resolve nothing, sapping Europe’s energy, and Greece’s potential, for years to come.