Greece’s finance minister Yanis Varoufakis went into his meeting today with Wolfgang Schauble, the German finance minister, urging Germany not to humiliate his country over its debts.
To which I’d say, “Too late, Mr Varoufakis. You have already humiliated your country yourself.”
What else can one say? The speed at which the new Greek prime minister and his finance minister appear to have given into demands and threats by the EU austerity-elite has been stunning. Within days of starting their round of meetings with political leaders in EU member states and with eurocrats in Brussels, the two would-be hard-left Athens firebrands have abandoned the pledges they made to Greek voters.
Before the election, they said that a Syriza government would repay only half the impossible debt earlier governments had forced on the Greek people. Now the new government says they will make the Greek people pay it all back.
The capitulation, so swift, so shaming, and such bad strategy, can be nothing but humiliation for Greece.
Mr Varoufakis has forgotten the truth: better to live one day as a lion than 100 as a sheep.
He has also forgotten how powerful he could be if only he would hold his nerve. Just look at the threats to which he has capitulated. They are empty.
First, the threat by the European Central Bank that it would no longer accept Greek bonds as collateral from Greek banks in return for liquidity as of next Wednesday. If the Athens government would then turn to the Greek Central Bank for liquidity, the ECB threatned they could veto that. This appears to have frightened the government so much that they have surrendered.
But they should instead think what would happen next if the ECB did go ahead with the threat. It would be what in the Cold War was known as “MAD” — mutual assured destruction, or what would happen to the United States and the Soviet Union if either actually fired off the nuclear weapons with which they threated each other for decades.
Which is why neither side ever carried through with the threat.
A collapse of the Greek banking system would cause financial terror across Italy, Spain and Portugal. The ECB is not going to risk that. So Mr Varoufakis should call the ECB’s bluff. After Mr Varoufakis’ meeting with Mr Schauble today, we can expect the Germans to refuse to roll back any of the cruel, destructive so-called “austerity” programmes to which earlier Greek governments agreed after similar threats from the Troika — the EU, the ECB and the IMF.
Again, Mr Varoufakis should call Mr Schauble’s bluff. We know that the non-Europeans in positions of power in the IMF now doubt the wisdom of trying to force Greece to get itself out of a Great Depression — for that is what this is, this is no mere “recession” — and into growth by the torture known as internal devaluation. If Mr Varoufakis finally were to say: “Greece will no longer abide by the Troika rules because the Troika rules are making our economy worse, and destroying all hope,” he would find he could split the Troika.
More, he would give hope to the suffering peoples all across the economic wasteland that is the eurozone. The suffering Spanish want the new Greek government to show that a democratically elected government still has the power to turn to the unelected elite of the EU and say, “Enough. No more. You are torturing us in order for your political project to stay together. We won’t allow it anymore.”
The Italians, whose economy ceased to grow almost ten years ago, and whose young population is being destroyed by unemployment and emigration, want the Greeks to succeed. So do the suffering men and women in France who have seen their employment destroyed by the euro, so do the Portuguese.
And so do the British eurosceptics who want to see the Mediterranean countries of Europe return to the kind of growth and happiness they so often enjoyed when they had their own currencies, free of political domination by the likes of Wolfgang Schauble. Did the Mediterranean countries always make the right decisions when they had control over their own currencies? Most economists would say not. But the countries were free to find their own solutions. And anyone who thinks the programmes now forced on countries such as Greece are the right solutions is either a eurocrat who does nothing but benefit from the misery of the Med, or a Greek politician who finds he is happier living 100 days as a sheep.
Though one wonders if the Greek people will give Mr Tsipras and Mr Varoufakis another 100 days in office after the humiliation they have brought on Greece.
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