I won't be coming home tonight
My generation will put it right
We're not just making promises
That we know, we'll never keep.
The last month showed one of the main competences of the Euro-zone in a situation of distress: its ability to ignore the truth and turn a desperate situation in a victory for all parties involved.
The first weeks of 2015 were firmly in the hands of Russian president Vladimir Putin and Ukrainian president Petro Poroshenko, from a news point-of-view, due to the enduring war and the cease-fire-that-wasn’t-one in Eastern Ukraine.
Lately, however, the new PM Alexis Tsipras of Greece and Finance Minister Yanis Varoufakis have successfully highjacked the discussions with their ‘runaway train’ attitude towards the Euro-zone politicians, when it came to the austerity measures and economic reforms required by the EU, in order for Greece to acquire a new slice of the emergency loan package.
The Troika? The new emergency loan package? Additional austerity measures and economic reforms? Pushing the Greek economy further into the swamp of poverty and despair, by squeezing the Greek middle and lower classes dry?
“Just say ‘no’ and everything will be fine!” But of course, it wasn’t.
The German political representatives and press cried blue murder about so much boldness and the Dutch and Finns were more than happy to join the choir of the aggrieved.
Even the South-European countries – of which one would expect that they would be the natural allies of the Greeks – turned against the bold attempt of PM Tsipras and Finance Minister Varoufakis to acquire an opt-out from the bitter pills of austerity and pointless economic reforms. “We have been brainwashed by the leaders of the Euro-zone and we have suffered for it. And now we want you to suffer too”.
So everything was lost, right?! To be frankly: not really!.
While the usual suspects in the Anglo-Saxon press and blogosphere predicted an imminent departure of Greece from the Euro-zone – the so-called Grexit – for the umpteenth time, they were only to find out that they had been wrong again for the umpteenth time in a row. A miracle was about to occur in the Euro-zone; once again!
In the end, the Euro-zone and Greece deployed one of those unparalleled pseudo-solutions, which make the old continent so notorious in the eyes of many other countries: Greece received its emergency loans and, in exchange, its new political leaders promised towards the Euro-zone to maintain the austerity measures and economic reforms in a slightly different form, while telling at the same time to their grassroots that the austerity and reforms would be finished. Or so…
And everybody was happy again!.
Chairman Jeroen Dijsselbloem was all smiles and received the credits for rescuing the Euro-zone this time. Schäuble mumbled a warning towards Varoufakis ‘that Greece should not play any games with Germany’ and then everybody cheered the new-found success.
The ‘emperor’ Greece had his beautiful new clothes, which should last him for at least four months. And after that? Well, the French say: ‘apres nous le déluge’ (i.e. the floods will come after us).
The Greek population was left behind dazed and confused for a few days: will the austerity and economic reforms now be diminished or not?! Yet, after a few days they found out that the Greek government had arranged an empty shell for them and the protests started again.
Especially, when they found out that the French would once again receive a few years more for deploying economic reforms at home and for meeting the threshold of the Stability and Growth Pact.
And now, it is unclear what will happen in a few months. Especially, the Euro-zone should consider that it has only bought time, during the last few weeks. A steady solution with real stamina has not been found and it will be impossible to find, when both camps will not give enough leeway to let each other breathe.
In my opinion, the biggest problem is still caused by the monomaniac fixation of the Euro-zone upon austerity and economic reforms. This very fixation and the general unwillingness of the Euro-zone to look at the demand-side as a driver for economic growth, has led to the slow suffocation of the consumers in all Euro-zone countries, including Germany.
What good is economic growth based upon wage reduction and exports, when it has led to such wage decreases, loss of purchase power and such a massive rise in unemployment, that the vast majority of lower and middle class consumers all over Europe have raised the white flag and hoard all their remaining cash for a rainy day, instead of spending it partially.
And one of the strangest side-effects is, that the countries which have suffered the most from this failed policy (i.e. Spain, Italy and Portugal, as well as the Baltic states and other East-European countries) want their ‘natural ally’ Greece to do ‘the full monty’ in its share of suffering.
Sometimes it seems like a perverse expression of the Stockholm Syndrome.
All other countries that did their share of bleeding want Greece to bleed more and more; nobody asks anymore whether this bleeding actually helps fighting the disease of financial instability and economic heartship.
The bleeding itself has become the main purpose. In the end, the disease might have been cured, but the patient will probably have passed away, caused by economic suffocation.
And that is the political stalemate now. Nothing has been solved. Greece is nowhere near a viable solution for either its massive debt problem or its faltering economy. And neither are the other European countries in distress. But everybody is happy now, with a fictional solution, for as long as it lasts.
Did you see the new clothes of the emperor?! Oh yeah, they look fabulous, don’t they?!
And so the “Fifty Shades of Greece” will soon appear in another leg of the crisis that never ends in the Euro-zone…, because nobody will look for a real solution, in order to not upset Mother Merkel.