So the unthinkable has happened and the Greek people have chosen to tell their German euro-masters where they can stick their austerity measures!
But could this be the first domino to fall in a cascade that will bring down the euro? For the sake of the long-term future of Europe, I do hope so.
Europe good
Don’t get me wrong — I’m an ardent europhile. But my enthusiasm is for an association of sovereign states with open borders to goods, services and people; but with members able to work their own economic levers as they see fit and in accordance with their own economic needs, rather than having things dictated by Brussels for the benefit of Germany and France.
Had Greece left the euro in the first place, there would certainly have been some years of pain. But a New Drachma would have been free to devalue, making Greek exports look considerably more attractive — having goods priced in euros in an economy that can’t compete with the efficiencies of Germany and France was always going to be a recipe for years of stagnation.
Greece would have seen high inflation and corresponding high interest rates had it left, but there would have been light at the end of the tunnel. As it stands today, Greece is suffering the pain but is still in the dark.
Syriza victory
The anti-austerity Syriza party has won Sunday’s election and has formed a coalition with the right-wing Greek Independents party, giving the new government a comfortable majority. The country’s new leader, Alexis Tsipras, is now set to renegotiate Greece’s bailout with a view to ending the “humiliation and pain“.
Speaking to the BBC, the likely incoming finance minister Yanis Varoufakis described the terms of the German-led bailout as “fiscal waterboarding policies that have turned Greece into a debt colony“. Them’s fighting words.
Talking heads across the eurozone are already urging Greece to stick to the terms of its bailout, though many are conceding that there might be room for some flexibility. But Germany, the nation really calling the shots, has indicated that it will not countenance any renegotiation.
Confrontation
The incoming Greek government has said it wants to remain in the euro, but its stated policy is clearly contrary to the current rules of the union. And although Mr Tsipras has said that “There will neither be a catastrophic clash nor will continued kowtowing be accepted“, there’s clearly a confrontation coming, and it could be messy.
To the Greek electorate I say Bravo, for voting to regain your own sovereignty. And if your actions help hasten the end of the ill-conceived economic experiment that is the euro, then many more in years to come will surely be thanking you.