Greece: tragedy or farce?

The Greek tragedy is becoming farce. Another bail-out? A default? What’s the plan?

There are three possible outcomes.

First, more bail-outs. It was Einstein who averred that the sure sign of madness was when you kept doing the same thing but expecting a different result each time.          

Second, a default and Greece goes bust and leaves the Euro. The doom-mongers are telling us that this would lead to economic devastation throughout the entire universe. So let’s try to get that into perspective. The total Greek economy is about the combined size of Lancashire and Yorkshire. It is about 2.5% of EU GDP. British banks exposure is pretty low, as they have wisely been dumping Greek bonds for quite some time.

Third, a restructuring whereby the due date for Greek bonds is shoved several years into the future at the same rate of interest, which at least reduces the size of the haircut. But French and German banks have heavy exposure, and I suspect that the Germans are worried that this might expose serious weaknesses in their Landesbanks.

The commentators and Brussels noise-makers are telling the Greeks that they must improve their productivity and exports and reduce their public sector. For a country that is rooted in corruption,  bribery, tax-dodging, fiddling the books and telling porkies on a monumental scale to get into the Eurozone in the first place,  this is massive self-delusion.

Meanwhile the Irish are getting seriously pissed-off with the EU for screwing them over the terms of their bail-out, with a very nasty interest burden. Part of the plan in this case is obvious – to get the Irish to cease their favourable corporation tax rates to bring them into line with Germany and France, thus removing at a stroke Ireland’s main hope of economic recovery.

But the Master Plan is political rather than financial. Further bail-outs will mean further control from Brussels. This will be a great leap forward in creating a political Europe. Next – Portugal, Spain, the whole of the Club Med? Once there is a critical mass full political union would be a walk-over.

This is a great opportunity for the Federalists to forward the onwards-march towards the Fourth Reich.