I’ve just got back from Greece, and I feel bewildered and sad. Most people I talk to in Greece have the look of someone who has been at the Front for five years, and the answer to every question seems to be a variant of “I don’t know” or “We’ll just have to see”.
The people were sold a story, a fantasy, back in the eighties, a dream of endless cheap credit, jobs and pensions. Of course they took full advantage of the credit – didn’t you, when they gave you all those free credit cards and loyalty cards?
And when Margaret Thatcher launched her campaign for tenants to buy their council houses, didn’t we all grab those cheap mortgages with both hands? And when the building societies de-mutualised to become profit-hunting banks, didn’t we all vote for it so we could get our windfall payments?
We are no different to the Greeks. We, too, believed in the banks and in international finance.
On the one hand, we were told that running the economy of a country was like running a household budget. You have to stay within your means. If you haven’t got it, don’t spend it, the Iron Lady said.
But on the other hand, she gave mortgages to people who couldn’t re-pay them. They defaulted, and went bankrupt, in droves.
Greece has been conned, just as we were. The European Union, the International Monetary Fund, the World Bank, the international financiers all told them the same lie – that borrowed money somehow doesn’t count. Debt and credit is how the world works, we are all in hock to the banks, and that’s all right.
The problem comes when you’ve been sold so many loans that the interest payments alone are more than the total income of your family, or the Gross National Product of your country. It is now impossible to fix.
Unless Greece can earn more money, there is no civilised answer. Nearly 60% of young Greeks are unemployed, and therefore paying no tax. More job cuts makes this situation worse, not better. And when the choice is between paying the mortgage interest and feeding your kids, what do you do?
And, on top of that, Greece is now receiving refugees from Syria, refugees who the rest of Europe refuses to accept.
As a result, the Greeks feel bitter and humiliated. If the rhetoric between Europe and Greece continues to escalate, the people of Greece will have no choice but to leave the Euro, re-invent that delightful and slightly whimsical currency, the drachma, leave the European Union, and find themselves being courted by President Putin, who will be more than happy to bale them out in return for a bridgehead in Europe. As a Greek friend of mine warned, “Greece will become Russia’s Trojan Horse in Europe.”
I can’t believe Europe wants this, and I’m sure the Americans don’t want a member-state of NATO to be in debt to Russia.
So let’s all hope that Europe sees sense, and allows Greece time and money to stimulate its economy. The Greek government want to stay, but not at any price. They want a Europe that allows more than one way to live, more than one way to run an economy and society.
Is this impossible? Because, if it is, I don’t hold out much hope for the UK to negotiate a new relationship. And if the UK leaves as well as Greece, I don’t hold out much hope for Europe . . . and hey ho, off we all go to another European war, the avoidance of which was the whole point of the Common Market in the first place.