Here are some quotes
from the diaries of Count Ciano (Mussolini’s foreign minister and son-in-law),
referring to Greece a year and a half after it was invaded and occupied by
Germany.
6 October 1942:
“Clodius [the Third Reich’s economics minister] is in Rome to discuss the Greek
financial question, which is very bad. If it continues at this rate,
sensational and unavoidable inflation will result, with all its consequences…
“All this is absurd, but the German army does not intend to reduce its interest
rate.”
8 October 1942 [Ciano
tells Mussolini about the Greek situation and quotes his reply]: “If we lose
this war it will be because of the political stupidity of the Germans who have
not even tried to use common sense, and have made Europe as hot and treacherous
as a volcano.” “He [Mussolini] is thinking of speaking to Himmler about this…
but he will not get anywhere.”
In 2015, as in 1942,
the Germans tend to overplay a strong hand. They insist that the Greeks abide
by austerity agreements that have just been rejected by Greek voters in the
general election on 25 January. The reason there was an election at all was
that the previous Greek government, drawn from the conservative New Democracy
and nominally socialist Pasok parties, could not get enough support in
parliament to select a new president because eurozone leaders and the IMF would
not relax their terms. The clear message from Greece is that no Greek
government can satisfy the demands of the troika (EU Commission, European
Central Bank and IMF) and expect to survive.
The Greeks have every
reason to reject the troika’s austerity programme. If ever an economic plan
failed, it is this one. When the EU and IMF took control of Greek economic
policy five years ago, they were meant to solve its debt crisis, modernize the
economy and restore it to health. They have demonstrably failed. A quarter of
the economy has been destroyed, 26 per cent of the workforce and 57.5 per cent
of youth is unemployed, and the economy is in crisis still. Listening to EU
officials speak of “progress made”, one is reminded of Tacitus’s line, spoken
by a British insurgent leader resisting the Roman occupation, which has echoed
down the centuries: “They make a desert and call it peace.”
Do the EU, ECB and IMF
officials who visit Athens, often displaying an arrogance and contempt for the
views of the Greeks that Tacitus would have found familiar, have much idea of
what is happening there? Megan Greene, chief economist for the Portfolio
Solutions Group, has studied economic relations between Greece and Germany
since 2006. Reflecting on the past five years, she wonders if IMF officials
“surrounded by security men in dark glasses” ever met any ordinary Greeks. She
recalls an ECB official in Athens being astonished when she told him that many
Greeks simply did not have the money to pay their taxes.
The desperation of so
many Greeks, four million out of 11 million of whom are on the edge of complete
poverty, might not be immediately obvious to an EU delegation in
chauffeur-driven cars. But if a member of the delegation looked at the sky he
might wonder about the smog hanging over the Greek capital on these cold winter
days and, if he inquired further, he would be told that the smog is caused by
Greeks burning old doors, scavenged timber and rubbish to heat their homes
because they cannot afford electricity or gas. Yanis, a naval officer who helps
run a charity to feed the homeless, says he has to bring food to them where
they are sleeping in the street because “they cannot come to our kitchen, they
are frightened of losing to other homeless people a prized sleeping place near
a hot-air vent from the underground, or where there is shelter from the rain”.
Of course, ECB
officials and German politicians may say that they don’t care what Greeks think
or do. They should have thought about the possible grim consequences for
themselves when they borrowed the money they must now repay with no debt
relief. Moreover, why aren’t Greeks more grateful for the money that Brussels
and Berlin have been doling out to keep them going? Both arguments are
spurious. The banks which lent money in the past must have noticed that the
country was run by corrupt politicians and crony capitalists, so what happened
should not have come as a surprise. Of the €227bn (£170bn) in loans from the
eurozone lenders and IMF, just 11 per cent has gone for government spending
while almost all the rest barely touched Greece before going to prevent the
write-down of bad loans.
All this looks
horribly tangled, but, unlike other world crises involving Isis or Ukraine, it
is fairly easily soluble. The Greeks cannot pay their enormous debts and the
German voters see write-downs and write-offs as theft of their taxes.
The obvious solution
is for a rescheduling of debt over a lengthy period at low cost to the Greeks,
rather than the present punitive EU-orchestrated regime that has done so much
damage since 2010.
I can think of only
one similar case of foreign intervention in the supposed interest of reform and
restructuring that proved so spectacularly calamitous: in Iraq in 2003-04,
earnest American neoliberals took charge of the Iraqi state and economy and ran
them straight into the ground. They have yet to recover.
Eurozone leaders
should be able to solve the Greek crisis, but it is by no means clear that they
will do so. A problem is that they feel all-powerful compared with puny,
bankrupt Greece and expect to come out the winner whatever happens. They should
be very careful here: I have spent most of my journalistic career writing about
crises and wars in places such as Northern Ireland, Lebanon and Iraq, where
large countries at first thought they could do what they wanted without fear of
local opponents. “Beware of small states,” warned the Russian anarchist Bakunin
in 1870, they can be much more dangerous than they look. Half a century
earlier, the Duke of Wellington observed: “Great nations do not have small
wars.”
Local crises and
disputes begin to have international consequences. This happened again and
again in Lebanon, a country half the size of Wales, after 1975. When the
Americans marched into Baghdad in 2003, their worst mistake was to imagine that
it did not much matter how local people reacted in a wreck of a country such as
Iraq. Eurozone leaders would do well to take seriously the wise words of
Mussolini, not exactly a paragon of moderation, urging the Germans to show
common sense in dealing with a Greek financial crisis and warning of the
explosive consequences for Europe if they did not.
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