Tuesday, 1 November 2011

Democracy's coming home.

There is much hoo-hah today over the Greek Prime Monster declaring that in order to accept foreign control over his country, he really should ask his people first.

I think, for the Greek in the street, the choice is a stark one. Either accept the bailout and then suffer penury plus foreign control, or decline the bailout and suffer penury without foreign control. The choice, it seems to me, boils down to "How would you prefer to be shafted?"

I don't blame the Greek people. Let's be honest, if our government said we could travel on public transport for free, retire at 50 and get paid wads of money for doing very little, what would we be thinking? Well, with our government, the first thing we'd think is "Oh hell, here comes massive taxation to pay for it all".

But what if the government also said "It's okay, the other dopes in the EU will give us the money. We won't have to be too stringent with your tax returns as long as there's enough coming in to make it look like we're trying."?

Okay. So we're offered an easy life and we won't be taxed to the eyes to pay for it. Who would turn that down? Sure, the sensible ones will know it can't last and they'd do what those rich Greeks are now doing - store the money overseas.

Who is to blame? The Greek government lied about their finances to get into the Euro, the EU (who don't have a very good track record with accountancy so might well have been incompetent rather than complicit, but neither is an excuse) let them in and promptly poured money over them. It was a Ponzi scheme from the start and everyone in any sort of political office knew it. The Greek cafe owners and taxi drivers and employees and most small to middling business owners were unlikely to know this. The big business owners and rich people did know it, which is why their money is now in Swiss banks.

Why did the Greek PM decide on a referendum? Via Fausty, I see there is speculation aplenty. My own speculation is far less complex because my mind is simple. If I was the Greek PM I would realise at once that neither option is good and I would be looking for a way to bugger off quietly. Preferably leaving the wrecked economy in the hands of the opposition or failing that, some handy idiot (aka 'doing a Tony' on them).

He can't simply resign because then he'd be seen as a rat deserting the sinking ship. Instead he has to arrange to be forced to resign. Hence the referendum. When he loses, he can do the honourable thing, call an election, get toasted at the polls and retire quietly to somewhere not utterly skint. History will recall that he at least tried to do things democratically. I don't see the need to invoke foreign schemers, all it needs is a politician anxious to get his neck off the line before the blade falls. But that's all speculation. I have no idea what's really going on there.

What really gets my interest in all this is the EU's reaction to the Greek referendum. Frau Merkel and the Sarky Frog have declared this referendum irresponsible and demand that the Greek nation do as they say without bothering with all that old-fashioned democracy nonsense the Greeks invented.

I don't see what they're so upset about. Every referendum that gives an answer the EU don't like just gets run again, and again, until the plebs come up with the right answer. This really isn't likely to be different, it'll just delay things for a few months..

Greece is going to default. It's bound to happen eventually. The more money the EU pour in, the greater the eventual losses will be. If they had been allowed to drop out of the Euro when the first brown flecks arrived at the whirly thing, they might already be on the road to recovery and the rest of us wouldn't now be completely spattered.

Then again, if the EU wasn't entirely built on corruption and incompetence, Greece would not have joined the Euro in the first place. It wasn't ready.

China are looking at the whole mess with the eye of someone at a car boot sale who is being offered a 'genuine Edwardian' cracked teacup with 'Made in Korea' stamped on the bottom. "That's right, guv, the Edwardians had all their dinner services shipped over from Korea. Dead expensive it was in those days. Cracked? Oh, they all arrived cracked. Hadn't invented bubble wrap yet."

The Chinese are not likely to pour tons more cash into the EU's bottomless pit unless they can be certain they'll get it back.

The EU will try to force the bailout even though it only postpones the inevitable and makes the eventual crash even bigger.Empire building is more important than the price of bread.

It's going to be quite a show. If there was anyone with sense in the EU they'd be taking a firewall approach - let the really dud economies default and use the bailout money to stop the rot spreading further up the line. Too late now, they've thrown the money away.

Speaking of bailouts, I have finally worked out how to put a PayPal button in the sidebar for tips. So, next time I put up a bit of entertainment, assuming you find it amusing and you've been to Frau Merkel's house and found another fifty billion Euros down the back of the sofa, do consider slipping a few pennies in the jar.

Just picture me as the horrible gap-toothed vagrant beggar with an almost-working harmonica and a tap-dancing dog on a string, and hope I don't follow you home.


Curmudgeon said...

Doesn't Papandreou have to face a vote of confidence next week anyway?

And I see tonight he's sacked all his military chiefs of staff (possibly to forestall a military coup).

Better stock up on popcorn.

View from the Solent said...

Tim Worstal has an interesting post at Forbes.
The Greece deficit is due to their interest payments. If they default totally, those payments become zero, as does the deficit.

Leg-iron said...

Curmudgeon - there is already talk of the collapse of the government and a possible coup. But as View from the Solent says, unless they default, they still owe the money.

Anonymous said...

Great post, Leg-Iron - and thanks for the mention.

I really don't know what to make of Pap's gambit. It seems to me that it can't have come out of the blue. Therefore, one must assume that during last week's summit, Papandreou was already holding this card close to his chest.

Someone else posited:

"Papandreou is resisting a double-cross already being cooked up by the bankers. He is playing the one card he has: If the bankers walk away from the partial debt relief committed in principle at the recent EU summit, Greece will default. And Papandreou wants that decision to be made, knowingly, by the Greek people and not by technocrats."

Clearly, Pap was getting it from all sides - the military, the EUrocrats, the bankers, the populace and from the opposition.

With a slim parliamentary majority of 2, the promise of a referendum completely wrong-foots the opposition, whether or not it is likely to take place. As such, even if Pap loses the confidence motion, that promise of a referendum might just catapult him back into power, should a general election be triggered.

However, the opposition are claiming that the constitution does not allow for referenda on financial issues - only on social issues, which is somewhat bizarre. Whether or not this is true, you can be sure that the EU will be putting its guns behind this argument.

The ironies in this bit of theatre are abundant. Foremost amongst them, to my mind, is that France has spent the past several hundred years in mortal fear of the German threat and sought, via the EU, to slay that dragon. Now, the French are likely to become a vassal state of Germany, due to the folly (or greed) of its 'leaders. Asssuming, of course, that the EU survives.

Lou said...

Err...okay they don't dish out free bus passes until you're 60, but they do make out that capping rates and most of the other populist garbage that got them elected won't cost us a penny "once we're our own masters".

And the "Athens of the North" also gets landed with a tram that no one wanted, that has no direct benefit to 95% of the residents and will cost a mint to subsidize.

Not 100% about the cost over runs on the stadium they're building in Glasgow but the parallels are too close for comfort.

Oh, but they do intend to let us have our say and they may give us the choice of... more powers or... more powers for Holyrood.

As yet there's no minimum turnout that might allow the silent majority to tell 'em to "stuff it".

dmcl01 said...

Either they vote YES and die or vote NO and be killed.

As some greek politician put it.

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