THE REFERENDUM ? A GREEK TRAGEDY

Who has ?betrayed? whom?

by
Michael Fabricant

Behind the raw politics of Sunday’s referendum in Greece is a very real human tragedy.

Over the past 5 years, Greece has lost a staggering 26% of its economy.

Bizarrely, if debt were removed and its economy were starting from an unencumbered base, its GDP would actually be growing – albeit modestly.

So when you hear Jean-Claude Juncker, the President of the European Commission, describe his feeling of "betrayal" over Sunday’s referendum, just imagine how the average Greek must feel.

When monetary union was settled at the turn of the century, it was sold to Europeans (and let us not forget that some Brits including misguided business leaders fell for it too) as a dream of never ending prosperity and growth. In that context, it’s easier to understand the current predicament of Greece from the human perspective.

For many, the return to the Drachma would be a backwards step – almost one of leaving Europe behind.

From Greece’s position in Europe, I can empathise why even despite such poverty ? yes, poverty – the EU and the Euro still seems a viable option.

On their doorstep lies their old foe, Turkey. A nation growing strongly and with a very young population. Compared to Greece, whose population is ageing and whose economy stands well behind that of Turkey, the insulation and protection the EU provides for Greeks is seen as something beyond the economic, and more one of geo-politics.

That doesn’t however cover the facts.

Greece’s GDP per Capita currently stands at $21,600. That’s just a couple of hundred dollars above Trinidad and Tobago. Compare it to Germany at $47,000 or even Mr Juncker’s home of Luxembourg, $111,700, and it’s easy to see that an untenable divide between Europe’s leaders and Europe’s monetary reality is causing human tragedy on our European doorstep.

There is an argument that if Greece left the Euro, it could devalue and rebuild itself just as Iceland has done. After all, a much cheaper Greek holiday would be very tempting. Greece’s shipping industry would also benefit greatly, but devaluation is not without its problems too. Pensions, savings, the cost of fuel, and overall trade would suffer initially.

But compare that reality to a continued membership of the Eurozone and Greeks will be asking themselves ?What is worse??

Bailouts and loans haven’t gone to the Greek people – they’ve gone to banks and government. People have been squeezed and taxes are spiralling for many. That’s not to say that Greeks themselves are completely innocent. Their expectation that their current retirement age of just 61 can be maintained is naive.

Similarly, their tax system simply doesn’t operate like that of a Western nation. Huge structural changes need to be made across the Hellenic Republic, but that doesn’t immediately stop the human suffering.

Neither is the EU innocent. Greece, and some other Club-Med countries, should never have been allowed to join the Eurozone and the huge unpayable loans made to Greece should never have been made in the first place.

In Brussels and Berlin, the human tragedy in Greece is little spoken about. It is inconsequential.

There will, however, come a point when Greeks lose all sense of reality ? they haven?t yet – and that will become dangerous.

Greece is not bordered by France or Germany, it is bordered by Turkey and looks out to an increasingly unstable Mediterranean.

Mr Juncker might want to think hard about what he considers to be a ?betrayal?.