The Lesson of Greece Is that Europe Is Run by Functional Sociopaths or Psychopaths
Syriza has made an offer which includes pension cuts and VAT tax increases, and “institutions” have refused to accept it, saying that (among other things) parametric measures aren’t acceptable (though they accepted them from Spain and Ireland). They will now counter-offer.
Labour laws, collective bargaining, pension reform, public sector wages, opening up closed professions, investment as well as value-added tax and corporation tax.
You do not believe, in any case, that any of these things will be good for ordinary Greeks, do you?
Total Greek Debt is about 330 billion Euros. 246 billion of that is “bailout funds,” of which over 90 percent went to private banks. As I (and many others) noted back in 2010, Greece should have defaulted then. This “problem,” such as it is, is now almost entirely the creation of attempts to bail out private lenders who should have done their due diligence, and who deserved to lose their money.
I note that the ECB is doing 1.1 trillion of “unconventional monetary policy,” about a third of which is Greek debt–mostly debt they piled up after 2010. A hundred billion of that, piled into 100 year bonds at 1 percent interest would about deal with the problem; Greece could handle the remaining debt.
A hundred billion, in today’s world, is really not that much money.
But the issue has never been Greek debt, per se, the issue has always been making it clear that no one can default and get away with it, let alone leave the Euro. Greece has been used to make an example, and when they elected a government with a mandate to negotiate an end to austerity they had to be taught an extra lesson for thinking that democracy trumped the right of debtors to run the government of those who owe them money and can’t pay it back.
(This is not remotely an exaggeration, as the terms of the deals made include the Government having to run new policies past “institutions”).
Greeks do not want to leave the Euro. They cannot devalue their currency, which is what they need to do, without leaving the Euro. They do not, apparently, even want to default and stay in the Euro.
In other words, Syriza has no bargaining position based on a popular mandate. Its mandate was “end austerity, but do it without being able to make any credible threats.”
Based on its public mandate, Syriza has no BATNA–Best Alternative to a Negotiated Agreement. In essence, they must take anything that Europe offers.
Or Syriza can turn to the public and say, “there is no deal to be had.” But “institutions” never give them the time necessary to, say, run a referendum to get a mandate.
Greeks want to stay in the Euro, as commenter Mandos has often pointed out, because the Greek government is terribly run. They’d like to be run by the German government. The problem is, the Germans aren’t offering the government Germans get, they’re offering austerity run by the Greek government.
If Greeks want a good government, they’re going to have to create it themselves. The first stage requires giving a government a mandate allowing them to do what reason and reality both dictate must be done: seriously threaten to default and/or leave the Euro, and follow through with the threats if a good deal isn’t forthcoming.
Absent this, Syriza’s only choices are to buckle, or to do something for which they don’t have a mandate. Of course, sometimes doing the right thing goes against the wishes of the majority of the population–and these are big steps, so it is hard to blame the Greeks for being squeamish. And in hard electoral terms, if Syriza did the right thing, the economy would need to improve before the next election or they’d be out.
But, also in hard electoral terms, they may as well, because if they don’t, they’re going to lose the next election anyway. The Greeks voted them in to end austerity; they will have failed, and the Greeks will most likely try someone else.
Good luck to Greece, the Greeks, and Syriza. They’re going to need it. But luck tends to come to those who are thinking straight about the reality of their lives, and the Greeks aren’t.
As for the “institutions,” let this be your daily reminder that our leaders are functional sociopaths, at best, but act more like psychopaths. Austerity has meant immense suffering, but it is more important to them to bail out their rich donors and friends and help make them richer and more powerful, than it is to make tens to hundreds of millions of lives (far beyond Greece) less miserable.
When you’re trying to predict how European elites will operate, assume that they are sociopaths on a good day, psychopaths on any other day. The pain and suffering of those whom they do not personally know is not real to them, and they do not care how bad life is for anyone who doesn’t make their lives, personally, better.
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