Sections

Chronicle of a death foretold: But is it Greece or the euro-zone?

Related images

  • CalPERS

Tags

Related Categories

The argument must be made that there is a special relationship that ties countries within the EU together, argues Joseph Mariathasan

The real test of a special relationship between countries, as in the oft-quoted relationship between the UK and the US, is the belief that one’s ally must be supported under all circumstances, even when you know they are wrong.

The UK’s special relationship with the US did see its strength tested during the Vietnam war. The UK’s then-prime minister Harold Wilson managed to avoid any British troops being sent to Vietnam, in contrast to the experience of the Australian and New Zealand governments, despite the pleas of US president Lyndon Johnson, who reputedly begged for at least a Scottish bagpipe band to be sent to show support. 

The UK’s former prime minister Tony Blair took the special relationship to a new height with the George W Bush administration, since Blair appeared to believe in the wisdom of his actions as he followed the US into the quagmires of Afghanistan and Iraq, whilst a large majority of the country looked on with horror. The idea of a special relationship between the UK and US may have its detractors, but it has also had a body of support that has lasted decades.

What, then, of the EU and the countries within it? The argument must be made that there is a special relationship that ties countries within the EU together.

That also means a special relationship between Greece and the EU, which also implies the EU supporting Greece even if it disagrees with the actions of the Greek government. Unfortunately, that special relationship between Greece and the rest of the EU looks so frail that one can only speculate how much longer it can survive at all.

But, as in Gabriel García Márquez’s masterpiece, ‘Chronicle of a Death Foretold’, are we all bystanders in an unfolding tragedy? Is Greece being allowed to disintegrate to atone for the sins of its past?

In February, I wrote that a Greek exit from the euro would inevitably lead to an exit of the EU itself by a desperate Greece, led by a far-left leadership that has strong sympathies with Russia at a time when Russian nationalism itself has become buttressed by its commonality with Greece through Orthodox Christianity. Greece moving into Russia’s sphere of influence supplied with appropriate economic support would be a rational response by both Greece and Russia in the wake of a chaotic Grexit.

That article drew a strong response both online and off-line, with disparaging comments about the likelihood of any move by Greece towards Russia. Recent events, however, have proved otherwise, with Greek prime minister Alexis Tsipras announcing earlier this month at the St. Petersburg International Economic Forum that “Russia is one of the most important partners for us”.

Whilst modern Greece’s relationship with Russia has been one of failed promises and disappointment, the history of modern Greece is intertwined with that of Russia. Ioannis Capodistrias, the czar’s foreign minister at the Congress of Vienna in 1815, became Greece’s first governor in 1827, while the Filiki Eteria (Society of Friends) based in Odessa led the call in favour of Greek independence from the Ottomans. For Western Europe, seeing Greece seek help elsewhere should not be surprising if the EU cannot find a solution to the impasse.

Despite the posturing of Greece’s prime minister and finance minister and much talk about Yanis Varoufakis applying his expertise in game theory to Greece’s negotiations, what does come through is incompetence and intransigence – but not just on the part of Greece.

Is the EU confident it can control the aftermath of a Grexit? Or is the outcome of a death foretold now inevitable?

The only question may be whether the ‘death’ is that of Greece alone, or at least its existence as an integral part of Western democracy, or whether it is that of the euro-zone and perhaps even the EU itself.

Joseph Mariathasan is a contributing editor at IPE

Readers' comments (3)

  • I am beginning strongly to dislike the wave of what I call Euro McCarthyism. We get this spread of fear of what will happen to Greece if it leaves the Euro, without any evidence whatsoever. Just as Britain was warned of the unavoidable disaster of staying out of the Euro.

    The single biggest problem if Greece leaves the Euro is that many Euro-rentier politicians and technocrats will enter into the declining phase of their careers.

    The threat that Greece will have to leave the EU as well is further fear spreading and totally unfounded. There will always be several countries within the EU which are not in the Euro. If Greece leaves the Euro, there will be more. And for free-traders that will make for a better Common Market. The key problem in the northern hemisphere at the moment is not the precarious position of a handful of eurocrat politicians, but turmoil in North Africa. We need an economic trading network which embraces those markets (not very different from or less advance than Greece) which raises living standards through trade and intercourse, without saddling them with a north european currency, debt, and its own social benefits and pensions bankruptcy.

    No-one seems to made the obvious remark that the banks would be open today if the Greeks had their own currency. Yparchei lefta? And what is the point of a "currency" if it is inaccessible? Greece is in default now: how best to get over it? With a currency that allows it to compete with Turkey, or with a currency that allows it to splurge on BMWs?

    Blocism is a post war relic. It was the little ships that won the Battle of Salamis.

    Unsuitable or offensive? Report this comment

  • May we should listen to Pyrros Dimas' testimony yesterday. Dimas was raised in Albania, under the communist regime, fled to Greece, and eventually became three times Olympic winner in heavy weight lifting. He said, "I refuse our children to stay in the queue , as I did, for 1 kg cheese or 10 eggs or 60 grams of ground beef from unknown origins, every month, with a coupon in their hand".

    What can North African countries contribute today in an economic trading network that competes with the European economy?

    A country can survive and succeed under its own currency only under one condition: that it has established solid institutions (effective justice, good education, a reliable health system, strong armed forces, a lean, functional and effective public sector) and a pluralistic political system with a strong central government that will enforce the law, and distributed powers among many groups with different opinions and interests that enable them to challenge the government at any time.

    The currency is the last thing that people should worry about. The first thing one has to ask before choosing a currency is: "do we have a solid democracy?". If the answer is "Not sure", then it's better to go where there is a higher chance of establishing a healthy democracy in the long term.

    I think that focusing our criticism against the Euro on the inefficiency of the Brussels democracy distracts us from the big picture. That, of the evolving democracy that the EU represents and which ultimately will unite Europe.

    The answer is: YES, fight for your rights and a better future for your children, fight the bureaucrats in Brussels, but do this inside Europe, not outside of it. The world outside Europe is a very dangerous place.

    Unsuitable or offensive? Report this comment

  • I agree! - The existential problem for Greece is how it can be integrated long term into the family of Western democracies. With hindsight, many things should have been done differently. But throwing the baby out with the bathwater now is probably not going to be the best solution. If the Eurozone collapses in the long term, as it may well do, so be it. But can Greece establish a stable and prosperous society regardless is the issue.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2466

    Asset class: Multi-asset funds.
    Asset region: Global.
    Size: EUR 30m.
    Closing date: 2018-08-16.

  • QN-2467

    Asset class: Search for a broker (mainly ETFs).
    Asset region: Global.
    Size: 250m.
    Closing date: 2018-08-28.

  • DS-2468

    Closing date: 2018-08-24.

Begin Your Search Here