New Europe: Greek financial system may collapse this week

This Monday and Tuesday (14 and 15 May), withdrawals from Greek banks exceeded 800 million Euros (small depositors), and if this trend continues, the Greek financial system may collapse before Friday, 18  May.

If the authorities prove capable of convincing the people that there is not real danger of Greece abandoning the Euro and returning to a local currency (which will imply a long period of galloping inflation) and the banks will resist till Friday, by next Monday dangers will be less. Indeed, by Monday the country will have a government, most probably a service government, which will carry on until a new general election on 10 or 17 June.

The 6 May election did not produce a coalition government as elected politicians have put their own  interests above the national interest and they did not compromise to form a coalition government.  The reasons why are easy to understand as certain politicians, mostly those that served in the last government of George Papandreou, by going to a new election will enjoy immunity for omissions and commissions during their ministerial service as the law on the responsibility of ministers offers them such opportunity.

The law specifically provides that Ministers can be charged only by the first Parliament after having served in the Parliamentary period before. Since the Parliament elected on 6 May, will have to formally convene and take an oath before the President of the Republic orders its dissolution, this small period of its existence as full body is counted as a Parliamentary period and the new parliament, the one that will be elected in June will have no authority to persecute the Ministers of disastrous Papandreou government.  Except those charged for money laundering which is considered a criminal case and is not covered by the law on “Responsibilities of Ministers.”

The chaotic situation in Greece was triggered by the runner up in the election, the quasi-communist SYRIZA party which in an effort to maximize on future PASOK losses, stated that they will denounce the loan agreement of Greece with EU/IMF, will block bank deposits in order to increase salaries and promised 100.000 new jobs in the public sector by nationalizing private companies.

The Greeks are completely confused. They do not know what to believe and what not to believe. The Leftist parties in antagonizing among themselves which one will get the remains of PASOK socialists are practically promising the resurrection of Vladimir Ilyich Ulyanov (Lenin) and there are many desperate Greeks who believe it.

The situation in Greece is not far from chaotic as modern Greeks do not have an oriental culture as it is widely believed in Europe, under the influence of the four centuries Ottoman dominion. People coming from the Ionian Islands which, during the Ottoman years were under the Venetians, have the same attitude.

Greeks, in their genes have two elements different from other Europeans. They are rebels and communists, stemming from their Orthodox religious dogma. Indeed, the Greek priests have been always led the liberation struggles of the people raising the guns and killing enemies under the Greek flag, an attitude far from Catholic/Protestant discipline. At the same time, the Orthodox clergy for centuries have emphasised certain aspects of the Holy Gospel such as “it is more difficult for a rope to pass through the eye of a needle rather than for a rich to go to heaven” or “who has two shirts must give one to his fellow man.”

Since the Greeks never had the bad luck to experience Communism in practice, they still have this leftist quasi-communist attitude which cannot be easily erased. To understand how true this argument is, one should consider that while the Communist Party of the Soviet Union was dissolved, the Greek Communist Party still exists and is one of the major political players in the country. A similar case would be after the bankruptcy of Enron for its Greek subsidiary to continue being in business and flourish.

At this moment, many believe that the only real power that can help the Greeks understand their real situation and stop living on myths, is the European Union as it is expressed by the European Commission. The EU should speak clearly with the same language that spoke last fall when they blackmailed Nea Dimikratia (EPP), then the leading opposition party to countersign the commitments of the then PASOK Socialist party undertaken by the country under the loan agreement with EC/ECB/IMF. Then the blackmail was clear and effective. Either Nea Dimokratia countersigns the loan agreement or Greece will not get the next payment installment and thus will not be able to pay salaries and pensions.

If such a requirement would have been put as a prerequisite of the disbursement of the payment which was made by ECB earlier this week, political developments would be very different and Greece would have formed a responsible government by now, able to avoid the collapse. At this moment, far better than the Greek President of the Republic, the European Commission can be effective in avoiding the Greek collapse. Such a collapse certainly will not have the same impact it would have two years ago for the rest of Europe.

It is worth mentioning on this occasion the responsibilities of the European Commission services (i.e. DG ECFIN, etc.) in the sense that for 30 years have been the auditors of Greek finances and they did nothing to avoid the Greek catastrophe. Similarly, when Enron went bankrupt in the USA, their auditors (Andersen) were taken to the Court.

Yet, a Greek collapse which will be accompanied by mass demonstrations, riots and maybe to a new civil war, may have a serious spill-over socio-political effect to other Europeans with “rebel” genes such as Italy, Spain, Portugal, Poland and others which will turn the European Union into bits and pieces, “before the cock crows twice” (Mark 17:24)