Global agenda: The three D’s

Once more unto the polling booth, O Greeks! Almost inevitably, given the results of the election held earlier this month and the vast gulf separating the main parties, the leaders of the main Greek political parties proved unable to cobble together any kind of coalition. The Greek president thus had no option other than to declare new elections, which will be held next month.

The mainstream media throughout the developed world, including in Israel, has adopted the mainstream political view that if the Greek people know what’s good for them, they will avoid a repeat of their performance last time, in which the center collapsed and the extreme parties on both flanks did extraordinarily well. The unmissable subtext of this so-called reporting and sheep-like analysis is that “this is really your last chance, idiot Greek people. You’ve had your fun, expressed your anger, or whatever you want to call what you did. Now get your act together and vote for one or the other mainstream party – or else.”

The new pair of leaders who run the European Union, Merkel and Hollande – the sad joke doing the rounds in Europe is that “Merkozy” has been replaced by “M--de” – had their first meeting against the backdrop of the Greek political crisis and issued a very clear message to the Greek people, along the lines noted above: “We can tolerate and maybe even sympathize with your antics up to a point – but don’t push us too far.” The instructions from Berlin are plain enough, and the Greek people will flaunt them at their peril.

The other message, pumped out ceaselessly by the mainstream media, is that the Greeks should vote for parties committed to implementing the very tough austerity measures that the EU and the IMF are demanding from Greece, because at the end of the day that is in their best interests. It’s tough, but given Greece’s dire financial and economic straits – which the lazy and corrupt Greek people and their leaders brought upon themselves, after all, but let’s not rub that in – the alternative is a total collapse of the Greek economy. Indeed, that is already under way, as the political paralysis fuels a run on the Greek banking system.

That, however, is where the mainstream media reveals the shallowness of its thinking and the extent to which its views are dictated by the liberal consensus in economics and politics.

There is an alternative approach that may be unpalatable to the European elite, which extends across the English Channel and the Atlantic Ocean and covers the Israeli governing elite as well. This alternative approach says, in a nutshell:

• There is no way that Greece will ever be able to repay its debts, which have not decreased in toto, despite the supposed “haircut” that the EU imposed, via the previous Greek government, on the country’s private-sector creditors.

• There is no way that the Greek economy will ever achieve growth, so long as it is a small sliver of the euro zone, with no currency or monetary policy of its own.

• With no future worth living for, Greek youth will either emigrate or rise in revolt against any Greek government that accepts further austerity dictates from Berlin and Brussels.

In other words, to offer any kind of future to its citizens, Greece must do three things, known in some circles as “the three D’s.” It must DEFAULT on its debts because they are an unsupportable burden. True, that will cause massive dislocation in Greece and will also inflict heavy losses on European banks and probably trigger a Europe-wide – and hence global – financial crisis. But that’s not the problem of the Greek people.

They should also DEPART the euro zone and, probably, the EU, taking all the bitter medicine that entails in one massive dose, rather than spread it out over many years far into the future. As to the threat or warning that this will kill the Greek economy, maybe it will, but perhaps it won’t. Even if it does, that’s preferable to a drawn out agony lasting years, with no end in sight.

And thirdly, they need to DEVALUE by recreating their own currency and making it competitive on international markets, thereby providing the possibility of growth for the Greek economy and a way out of the endless austerity trap.

That is the true choice, and there are actually many economists who are convinced only that path can bring relief and redemption, although it will be very painful at first. They point to the Iceland experience in 2008, as compared to that of Ireland at the same time. Iceland let its banks go bust and told the EU, the British and the Dutch it would not compensate them for their losses or accept their dictates. Iceland was severely punished and its economy slumped for a year or so.

But after that, things turned around – because the punishment of an 80 percent devaluation became the instrument of salvation, and the tough and resilient Icelanders pulled together and got the show back on the road.

Would Greece be able to do the same? Who knows? But it helps enormously if the mainstream, pro-European parties and politicians in Greece would at least admit that the option exists, that it is thinkable and even doable, if you are determined. By doing that they would not only come to grips with reality, but would also prevent large numbers of desperate Greeks from being pushed into the arms of the extremist parties, some of whom are overtly antidemocratic, whether fascist, communist or outright Nazi.

The longer the liberal elite of Europe and its allies elsewhere insist on imposing on Greece and other countries their agenda and the policies that support it, the more likely it is that they will achieve precisely the opposite result, endangering the entire EU and the postwar liberal democratic structure of Europe. That is what is really at stake in the Greek crisis, and that is why what happens in that small and unhappy country is so important.

landaup@netvision.net.il