One and a half months after the Greek election on the 25th of January, the Greek government has a clear understanding of its problem. WhenSyriza won the election, it had no idea of the cash flow problem the country would be shortly facing. Now it does.
On the other hand, it took one and a half months of negotiations with the Greeksfor the Eurogroup to realize that the Greek problem, besides being a problem of numbers, is primarily a socio-political problem. Withfar right parties flourishing in half of the member states and neo-communist parties thriving in the other half, Greece is a time bomb in the foundations of conservative Europe. If it explodes, Buona Notte Europa Buongiorno tristezza!
The Paradox
Is there a way out? At prima facie, no, there is no way out. Greece is the economic paradox of the world. After five years of economic crisis and deep recession, with salaries and pensions cut to half, an unemployment rate of over 50% and rents dropping by more than 50%, consumer goods and services keep increasing, every year.
This is the problem of Greece and it is due to a huge public sector with more than one million excess civil servants (from a total population of 11 million ), corruption of the public sector horizontally, vertical and systematically, and extreme cartelization of the market.
See also: Only Juncker Can Save Greece
As everyone in Greece, from bottom to top, is a prisoner to somebody with the political leaders of the country being prisoners of a few oligarchs controlling the cartels, there is no way out, indeed.
The trap
The Greek government has been trapped in its pre-election rhetoric, the arrogance of the victory and the ignorance of reality. As a result, following the election, they arrived in Brussels light and smart to fight the Great October Revolution ignoring that the Red Square is far away and only Waterloo, some 20 km from Berlaymont, is close to their aspirations.
Arriving in Brussels, the Greeks had taken for granted that they would be going back home with fresh cash, that they would have obliterated the three-member supervisory committee representing Greece’s lenders known as the 'troika', that they would have abolished all contracts defining their commitments signed by the previous government known as Memorandum I and Memorandum II and they would have negotiated a generous haircut of their debt.
In Brussels, the Greeks came across the ugly reality of the European Commission and the Eurogroup, institutions known to the Brussels experts as the “Corporate Gang.” Then they discovered the mess they were in.
Returning back to the Greeks, they had to revoke all pre-election promises and post-election decisions (minimum monthly salary €751, blocking of privatizations, thirteenth month salary to employees and pensioners, etc.). However, the Brussels “system” made two important (!) concessions. They agreed to re-nominate the notorious “troika” to “institutions” and the “memoranda” into “agreements.”
Today, Monday March 9, Greek Finance Minister Yanis Varoufakis is back in Brussels bringing seven proposals of the Greek government to the Eurogroup.
However, no matter what the Greeks are proposing, the Brussels “system” seems to move in two directions. It will not give anything substantial to the Greeks and as the Greeks have changed attitude and passed from empty threats to the unconditional surrender, Greece will be punished. In thisway, the 'system' wishfully thinks that other neo-communist Europeans will be scared.
The 'system,' despite it being the most sophisticated and efficient administrative machine of the world, is wrong. It is good in technicalities and legal arguments but it has lost touch with politics. Politics in Europe died together with Willy Brandt, François Mitterrand and Margaret Thatcher.
That is why the European leadership of today does not understand that societies are like tectonic plates. When they start moving, nothing can stop them. That Greece will be paradigmatically punished is irrelevant because the change in Europe has begun and nothing can block it.
Greece was wrong when it first came to Brussels without having the minimum knowledge of the real situation of the country and without having the minimum idea of what the Brussels 'system' is. Greece was also wrong when it came to Brussels arrogant, unconventional and ignorant, politely threatening everybody.
Greece did not know that the only language the 'system' understands is the lingua franca and once they started, they had to go all the way through.
If Greece would have come to Brussels with alow profile and asked for help presenting politely, yet clearly, the partial responsibilities of the 'system' and of certain Member States for the catastrophe, certainly the results would be better.
The Three Options
Greece is unlikely to get any money from the ECB to pay the next IMF due payment. Under the circumstances, it willeither have to stop paying salaries and pensions and pay the IMF or pay all by enforcing a hair cut to bank deposits. However, this situation cannot last for long.
The other option Greece has is to stop payments and create a credit event, which means bankruptcy. This last option is probably what both the Greek government and the Eurogroup would consider.
In the last one and a half months, the Greeks passed from a state of misery and depressionto hope. A prolonged period of deep poverty without the possibility to import medicines, fuel oil, and other consumer goodsmight turn people’s hopes into total resignation and serve to the government to introduce the real structural changes needed. The outlook for Greece, however, is not as simple as that as Greece is a complex system within the larger complex system of Europe.
The Russian Roulette
Greece has a coalition government of neo-communists, right-wingers, Marxist ideologists and intellectuals withthe awakened syndrome of nationalism as a common denominator. Thus, the situation is quite confusing.
The government does not havethe intention to present a possible agreement with the Eurogroup in the Parliament for approval, but it raised the stakes speaking of a referendum, not for the Euro but for the approval of the deal. This is logical because it will be the only way to proceed with the tougher austerity it will be required to implement the new agreement. This seems logical.
However, one cannot expect much logic from a wide multi-ideological coalition of no ruling experience. In this context, to exert multi-sided pressures to Greece may prove counterproductive and as the Greeks have nothing to lose anymore, it may result ina Russian roulette for Europe.
Under the circumstances, if certain Eurogroup members extend the confrontation with Greece further and mobilize Ankara in the context of pressures (as it seems Germany does), then the problem will change and from financial, it will become geopolitical. In this case, this eccentric government coalitionmay well abolish “Dublin II” thus facilitating the penetration of ISIS, Boko Haram and others to Europe and involve Russia in the case of external threats.
http://www.neurope.eu/article/greece-eurogroup-and-impasse