Grexit Daily News – 10 July 2015


10 July 2015  —  A stay of execution?

As I am writing this, Parliament is debating whether to grant its support to the offer made by Tsakalotos to the creditors. It is certain that the proposal will attract the acceptance of the vast majority of MPs. It is less certain whether Syriza will survive. I think it will not and a new election will be called imminently.

Will this offer herald a deal and a 3rd bailout? Indications tonight are that it will and Grexit will be avoided, for now.

Grexit should be avoided for now. Europe has some (inadequate) contingency planning, but Syriza has none. One does not attempt to Grexit with the economy in free fall, with the banking sector a smouldering ruin, capital controls in place and an explosive public mood after the farce of the divisive referendum over nothing.

If not now, should Grexit be attempted later? A third bailout leaves a score of significant issues unresolved. What comes after Syriza? Who can enforce the new deal? Will discontent make Golden Dawn the main opposition? Is it appropriate to be ruled by technocrat diktat?

Greece could choose to accept that its political and economic system failed, and that maintaining some semblance of normality for some sections of the population entails a surrender of sovereignty. It could on the other hand choose Drachma and take a shot at something else.

I think that once conditions calm down and Grexit does not mean apocalyptic collapse immediately, this question will need to be put to the people. As I have said before this should be done via an election where the Euro-Friendly parties face off a coalition of Drachma advocates.

I would vote for subservience and technocracy even though I built a career arguing against it. Why? Because the Syriza experiment has proved that Greece is long on populist, ignorant, incompetent fanatics and short on leaders who can make a return to the national currency a success in the long run. They say that countries get the politicians they deserve. I leave this to you to reflect on.




6 thoughts on “Grexit Daily News – 10 July 2015

  1. The situation in Greece is EXACTLY like the situation in Italy, except two things: our debt is lower and our populists (5 star movement) were not able to govern even if they had 25% of the votes (so they are stupid populists).
    We had really bad governments in the past 30 years (and we still have). Our government can only raise taxes. Today they transformed our schools in barracks (school director has almost absolute power). Rich people have privileges you cannot imagine (and given the privileges your rich have this is all I have to say). Our Parliament is made of 1000 people who get at least 5000 € per month (except the privileges I was talking about, such a free phone, free apartment in Rome, ridiculous prices everywhere and more and more and more), but most of them (between 700 and 800) get 10000 and more per month. They are entitled of a pension after a few months after being elected (not sure, but I think 7 months are enough). And there is so much more…
    We have toooo many public employees and corruption is almost a status symbol in Italy.
    And, last but not least, we have organized crime inside of almost all politic institutions…

    I know what frustration means and I know why many Greeks hoped in Syriza: it’s called despair (ἀπόγνωσις in ancient Greek). But this is not a good background for a Government, because when you embody the hope of a Nation, and then you prove incompetent, well, then you will make a looooooooong fall without a security net.

    I really hope you will have elections very soon and I hope you will find a leader who deserves your confidence.

    Καλὴ τύχη!


    • Georgia Pappa says:

      It’s not exactly like Italy. Up to Crisis we had very, very, very solid and powerful goverments which were corrupted and part of the vicious circle, zaleuco.
      As far as the “techocratic” goverment that Glivanos proposes, being here done that and quite unsuccessfully. Τὸ δὶς ἐξαμαρτεῖν οὐκ ἀνδρὸς σοφοῦ (to commit the same sin twice is not a sign of a wise man). “We’ve seen the technocrats as FinMins and we all remember the modernizers (εκσυγχρονιστές) in Gov and their proclamations (do you remember Greece’s major advantage is its economy? I do!)


      • I understand what you mean. I was talking about the same thing (corrupted and vicious governments) except that they were not strong.
        Italy is a Republic since 1946 (69 years) and since then Italy changed government 63 times… Given that a government should last 5 years you can understand that Italy has never had strong governments.
        I think a technocratic government could help Greece.
        It was a technocratic government that saved Italy from the situation Greece is suffering in these days. It was led by Monti (2001-2013). There were austherity measures and everything looked worse, but we survived it.

        What was Greece’s major advantage?


  2. For me, one of the underreported problems with technocratic governments is that they make so many technical mistakes! Seriously. If you watched things unfold in Italy, the technocratic Monti government made a number of serious mistakes in basic issues of economics and legality, from which Italy is still trying to recover. Also, Monti’s weak understanding of politics actually kept Berlusconi in the game longer than might otherwise have been the case had normal politics allowed the voters to get rid him themselves.

    Also, in the case of Italy, the German hands that installed Monti were largely hidden from view. Here, I am not so sure it wouldn’t inflame anti-German sentiment, including beyond Greece (maybe even more beyond Greece).

    But as to the larger of issue of Grexit or no Grexit, it is hard to see why investors and capital would return to Greece so long as this remains a constant threat, unresolved.


  3. I tend to disagree, but since we can’t know what would have happened had things been otherwise….

    But since then, we know more about those actual events:

    One is that EU politicians, led by Germany, approached the Obama administration about joining in a scheme to remove Berlusconi. (This is from Geithner’s memoirs.) There is a lot of evidence laying around that financial markets were manipulated to create a heightened sense of crisis and threat that made Italy feel compelled to reach for an unelected “salvation” government.

    The other thing we can see is that German-led austerity has failed Italy, both economically and politically. The end-run around elections only extends the period in which Italians view their government as lacking legitimacy, and the adherence to bad economic policy prescriptions tethers Italy to European stagnation and high rates of youth unemployment. Italy, in my view, is being robbed of some very precious assets and getting nothing in return.


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