Nothing can stop Greece leaving the Eurozone and a return to the 50s

New Europe


Greece is living its last days in the Eurozone. The managers of Europe, including Angela Merkel, look at Athens perplexed and compassionate, yet with relief as they have secured their banks by passing the Greek papers to the Central European Bank (ECB), thinking now what to do with Italy and Spain. They are completely missing the point, and have not realized the potential threat  the socio-political volcano Greece precludes. Maybe because the current leaders of Europe are not leaders but only managers the majority of which are not even good managers. As to the recent interest of Germany to keep Greece in the Eurozone, even making a concession of its original demands is due to the fact that if Greece returns to the local currency, in two weeks time the euro will strengthen by an estimated 20%, and German exports will accordingly drop. However, this will be only temporary because the Euro was designed to fail at any case.

“We can see Gods, we can see Demons, but we cannot see our nose, dear Athenians,” said Pericles, and history repeats itself in the window of our time frame. Indeed the real problem, what will make the euro and the Eurozone history is not Italy or Spain. It is France, and why will be explained by my friend Christos Kissas in the coming days.

The problem we will analyse today is Greece, it is political and it concerns the entire European Union despite the clearance of the Greek papers in the German and French banking portfolios. Greece is not an island, is a full Member of the European Union but the later, has never become a real Union but it turned to be a “complex system.”

Indeed, the EU is not a Union as the United States is, as it does not have a common fiscal policy or a common budget, nor it has a common foreign and defence policy. However, it has all the elements of a complex system. It is composed of 27 interdependent, interconnected diverse entities. The EU, as a complex system, given the magnitude of its components (Member States), it is robust. That means it is unpredictable and it can produce large events such as crashes and wars. At the same time, as a robust system, the EU can afford large traumas and still adapts and holds together. Which means that if Greece is withdrawn from the euro and the EU, the system will maintain functionality and would not be irrevocably traumatized because of that.

Yet, complex systems are subject to bottom-up emerging phenomena capable of making the system collapse. In our case, if we have a serious, uncontrolled generalized social unrest in Greece it may generate a spillover effect, which will likely contaminate the most socially incoherent, economically weak countries countries. They will be the countries, which followed policies similar to the Greek, putting extreme pressure to low income classes with austerity measures such as reducing pensions, salaries as well as health and social security benefits.

From that point of view, the socio-political, and not the economic, Greece constitutes a major threat to the social structure of the European Union, and the managers of the later are seemingly not conscious of the threats, being convinced that acting as good accountants will resolve political problems that took have a century to formulate.

What is Wrong with Greece?

To see what is wrong with Greece one has to look with the eyes of an historian as to how the political power was formulated in Greece after World War II.

At the Yalta (Crimea) Conference (February 4-11, 1945) the heads of the winning powers of WWII, Roosevelt, Churchill and Stalin decided how to split influence in Europe, and among others, decided for Greece to fall under the western influence by 90%, and the Soviets (communist rule) 10%. Despite this clear and explicit decision, the Greek communists decided to oppose the Yalta agreement and pulled the country in a 4-year civil war which destroyed whatever was left from the war and pushed Greece back to the thirties while Europe was healing its wounds and progressing.

The post-war political and economic elite, which emerged after the civil war, while had as common denominator the values of the West, free economy and democratic rule, was artificially divided into a centre-left and a centre-right group. These groups in form of political parties under different names are ruling Greece, exchanging power between each other, until our days. The only dividing element in the politics of the two political groupings is rhetoric while the uniting element are the communists, which the two political systems maintain alive so as to function as a threat.

Indeed, all over Western Europe communism had a marginal role after the war and disappeared completely after the collapse of the Soviet Union in the late eighties except for Greece where it still flourishes despite Greece, after the civil war experience, being the number one country in Europe where communism should have totally disappeared.

From the practical point of view, the way the fruits of power are divided in Greece (positions in the public sector, etc.) is simple, 70% for the ruling party and 30% for the opposition. As to foreign or national investments and the alike, which require a clear and transparent environment nobody cares. What counts is power, not investments.

Under the communist threat, the two ruling parties, secured their rule in the past half a century by hiring through the years in the public sector over one million excess public servants, who with the tolerance of the ruling elite were let to develop a systemic corruption, horizontal and vertical, which makes the great part of civil servants co-conspirators in crime thus force to politically support their benefactors and protectors.

Task Force and Troika, naïve or incompetent?

To cut the long story short, the problem of Greece is one and only, and if the Greek government were forced to dismiss one million excessive civil servants, the country would immediately become surplus, the public deficit would be cured and the foreign debt would be served. These are elementary school mathematics and it is worth wondering why, things that even the tourists realize when visit Greece, the famous troika (representatives of EU, ECB and IMF) and the most regarded Task Force of the European Commission did no perceive. Are all these experts so incompetent and naïve or the Greek politicians are co capable to cheat on the best brains of Europe easily and permanently?

Instead, the brains from Europe, have agreed for the Greek authorities to impose more and more taxes (despite it was officially stated that only 20% of what the Greek taxpayers payments goes to the budget while the rest is divided among civil servants and politicians). In this way, the Greek economy was put into a spiral of permanent recession, which will lead Greece out of Europe in the next couple of months and will bring the Leftist opposition Syriza, the re-branded Socialist party of Papandreous in power, perpetuating the Greek system.