Greece won a good deal and Germany is
in a difficult position – if I may put my 2 cents in..
-It doesn’t help beating a dead
horse-
It doesn't matter how much you want
to continue riding, beating a dead horse is not going to get you
anywhere.
The
urban dictionary
If Greece were a company, the
solution of its crisis would look quite simple. A company unable or unwilling
to pay back its debt becomes insolvent:
· If the creditors agree on a freeze in the debt or a
major waiving so that the amount due is bearable, the company might have chance
to survive (provided that it is well managed)
· If the creditors disagree, a court takes control of
the company and if it sees the chances for a recovery it may grant the owner a
chance to reorganize and reform the business, otherwise the court seizes
control and liquidates the business assets
I think that Greece put itself in a
very advantageous position to get a good deal.
And here are the reasons:
1.
Legally you cannot expel Greece from
the Euro nor from the EU.
a.
The treaties do not
foresee this possibility and changing the “law” to accommodate the creditors’
(the FMI, Germany, Italy and others) wish would sound too much of a
Berlusconian move to be digested by the general voting public
2.
There are many reasons why even Germany
has a crucial interest in keeping Greece into the EU and the Euro
a.
Speculation will be happy. An expulsion of Greece from the Euro
would be the empirical evidence that the Speculation is looking for: it is
possible to target a state and make its economy collapse. Italy, Spain,
Portugal will follow Greece in the free fall.
b.
Germany has an interest in a weak
Euro. If you take a
peek at the booming German export (Germany’s export surplus hits record high http://www.ft.com/cms/s/0/bf49b530-4852-11e3-8237-00144feabdc0.html
) you may come to the conclusion that the weaker, the euro, the cheaper the
products, the better the German export. No matter how you put it, the longer the crisis persists the
better for Germany
3.
The Greeks said stop to the vexation.
By voting for
Syriza and voting no to the referendum, they told twice Europe and the Greek
government that the austerity is unbearable (once would have been enough but
Greeks are patient people).
a.
There is no point in beating a dead
horse. If the people
of Greece say stop so be it. Their can not and should not be humiliated.
b.
I
hear about generous pensions and a State living above what it can afford. That
might be true, but that was the price to pay for stability in the Mediterranean
see. Dictatorships and lavish center-right governments hiring and spending was
the price to pay for keeping the communists away from Greece (and Italy for
that matter). Europe has taken a big advantage of it. In any case this is a
thing of the past and it should not be put in the foreground. Taking the past
to justify actual or future policies is always a bad idea and would justify the
Greek request for the unpaid war compensations
4.
If help is refused in times of
difficulties, we are refusing
the basic principle of solidarity, on which families, communities, states and
international community are based
5. Even if Greece went bankrupt, after a
period of additional suffer it could recover well as the cases of Argentina and
Iceland have shown. Incidentally, in the past England built a worldwide
imperium by refusing to pay the Florentine bankers. But with one important
difference: Greece will still be in the
EU and will become –with good right- a wounded and angered partner
guess when the crisis happened…
6.
The paradox is that it is easy and
possible for Europe to help Greece.
The only difficulty is: how can I explain it to my voters and taxpayers
–without loosing face- after I have said that I will be tough?
In a nutshell:
I believe that Mrs. Merkel is in a
difficult position to choose between appeasing the CDU/CSO and breaking Europe
or give in in the Greek crisis and suffer a major internal political defeat.
The choice is between making or
breaking Europe. In a world in which we all are confronted with global problems
for resources, peace, pollution, a united, federal Europe is the only possible
future.
Here is how I think it will end up:
Freeze or cut in the debt versus
reforms (my bet 30%). Everything will close within 10 days or so and the Euro
weakness will persists for a while. Some EU governments will loose their face
and possibly (hopefully) the elections.
At the end of the day I believe that
Mrs Merkel will give in and therefore she will go down in history as one of the major
contributor in the construction of the European federal state. She could have
taken this decision at the beginning of the crisis and be the master of the
situation. How grand would have been a generosity gesture!!!!! We would be many
step ahead in the creation of a single European state…However many of our
politicians still live in the early 20th century and she has to deal
with them.
So if Mrs Merkel is the hero, who is
the villain? In every good story you need a villain. And the press, at least
here in Germany, has presented Varoufakis as the villain.
Is he really the villain? I do not
think so.
If you represent a company or a state
and you are telling the international community that Greece cannot repay its
debt, you would expect to be heard.
Adding debt to debt is not only
pointless is insane. And preparing a new plan knowing that the basic
assumptions are wrong is beyond stupid. Mr. Varoufakis did exactly this. And
was met by arrogant people who were catechizing him on how lavish the Greeks
have lived so far. He did not need a moral lesson and neither did Greece. He held his ground and that is the reason
why he is my business idol.
If you are active in certain areas of
politics or business you will find some individuals ready to sell their mothers
to get to their objectives. Mr
Varoufakis refused to increase the suffering for the Greek people and this is the
reason why he is my political idol.
If you are in a negotiation and the
other party requests you to get rid of your leading negotiator, the one you
have chosen, you know that your counterpart does not meet the minimum ethical
standards. No matter how arrogant he might be. Mr Varoufakis resigned to increase the success chance for the Greek
people and this is the reason why he is my ethical idol. If I could I would
help him wear the despise of those who requested his head with proud.
Let us wait 10 days and we will see…
