Adrian Hamilton: Politics should finally decide the Greek crisis

International Studies

Share
Related Topics

So the Greek parliament has voted to pass the "crucial" budget cuts, albeit with the narrowest of majorities. And we seem to be exactly where we were before. The strikes go on. The Greek public reject them. The economists continue to predict a default. The politicians and commentators outside still talk – with some eagerness on this side of the Channel – of the demise of the euro and even of the European Union.

Of course it might have been very different if the parliament had rejected the deal. Financial meltdown was the least of the gloomy warnings from the IMF, the European Commission and the European Central Bank. Yet even that was being welcomed by some economists as preferable to a long and lingering crisis with only one ultimate conclusion – Greece's default on its debt and its exit from the euro.

They may be right, of course. But the one element that has been missing from all this analysis has been the political one. This crisis is political. It has been made so by the protests in Greece, as in Spain and now here in Britain. And it is fundamentally political in the wider sense that the efforts to "rescue" Greece from bankruptcy are driven by a desire to keep its problems from bringing the entire European house of cards down with it.

The narrow interpretation that would have the Germans, as the French, driven solely by the determination to stop a Greece default ruining their own banks is far too deterministic. European leaders, even David Cameron for all his public disassociation from the rescue efforts, are acutely aware that this is a real point of decision for Europe. If it can master this crisis, then Europe can show some worth. If it can't, it is difficult to see the whole project holding together.

The problem is that the politics are so fraught. It is very easy to regard the protesters on the Greek streets, as those here, as simply obstructionists screeching against the inevitable. And there is something pretty distasteful about a country which has grossly overspent, whose middle class evades their taxes, and whose political elite has bought votes through grossly inflating the public sector, now denying the right of their creditors to call in their loans.

One of the shortcomings of democratic politics in Europe brought out by this crisis is the extent to which citizens, having voted for governments on the basis that they were bringing wealth and growth, then declare that the elected politicians and their deeds are nothing to do with them. It's a sign of just how far parliaments and the people have grown apart. But then it is hard not to sympathise with ordinary Greeks, as ordinary British, who have paid their taxes, worked hard and are now being made to pay to bail out banks whose greed was responsible for the crisis in the first place. That is all the more so when every financial expert is telling you that the cuts demanded will never work and your sacrifice is quite fruitless.

This crisis is not going to be sorted out until there is some reconnect between what governments are trying to do with bail-outs and enforced austerity measures and what their voters feel is fair. And that, in turn, requires some sharing of the pain between creditor and consumer.

To that extent, one has to respect the French – so roundly abused by the Germans as well as the British and the Americans – for trying to find some formula by which the bankers take a voluntary "haircut" by deferring repayment of a substantial part of their loans without triggering a formal default with all its legal implications.

The German voter may be suspicious of anything that lets the Greeks off the hook. Why, after all, should the hard-working German savers in the north have to pay for a bunch of tax evaders in the south? But, if the alternative is to saddle the Greeks with medicine that will only worsen their condition, then an urge to flagellate seems the worst political response.

If the European Monetary Union, and indeed the EU, is going to get out of this crisis, it is going to have to face down the financial community. It can do it. The total sums involved are not overwhelming, and the size of the Greek economy compared to the whole is not that big.

Rescheduling is what happens with a bank and an ordinary customer who has got into too much debt. Some repayment is better than none, while the financial markets always face the possibility of being caught short in their desire to keep chasing the price of Greek assets down and the cost of their borrowing up.

The banks will kick and scream at anything that causes them to take a loss. The economists will argue that it never pays to confront the market. But after all the damage these two groups have done, maybe their most constructive contribution to a democratic solution would be a period of silence.

Freedom is not just another word



Timothy Garton Ash, formerly of this parish, made an interesting point at the end of Aung San Suu Kyi's first Reith Lecture this week. The mystery, he argued, was not why people went along with oppressive governments, but how individuals had the courage to resist them.

He's right. A decade ago the shelves were full, and they still are, of books examining why the German population co-operated with Nazi rule. Now the interest is more in those who do rise up and, like Suu Kyi (who has just been formally warned by the Burmese junta to cease all political activity), continue to fight despite all adversity.

I'm not sure we can understand such a reaction here in Britain, so distanced are we from war and oppression. But what we can do, as we respond to the Arab Spring, is admire those who brave the security forces to challenge regimes.



a.hamilton@independent.co.uk

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Business Development Manager / Sales - OTE £45,000

£35000 - £45000 per annum: Recruitment Genius: This company is a solutions / s...

Recruitment Genius: Sales Executive - OTE £45,000

£18000 - £45000 per annum: Recruitment Genius: A Sales Executive is required t...

Recruitment Genius: Test Development Engineer

£35000 - £40000 per annum: Recruitment Genius: Are you inspired to bring new a...

Recruitment Genius: Trainee Motor Engineer

£14000 - £18000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

Read Next
Kennedy campaign for the Lib Dems earlier this year in Bearsden  

Charles Kennedy: A brilliant man whose talents were badly needed

Baroness Williams
Nick Clegg (R) Liberal Democrat Leader and former leader Charles Kennedy MP, joined the general election campaign trail on April 8, 2010  

Charles Kennedy: The only mainstream political leader who spoke sense

Tim Farron
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific