"In the long run we are all dead". This was Keynes' distinctively acerbic and somewhat morbid quip that criticised the distant and overly long-sited economic mantras of the laissez-faire economists of his era. The notion that an economic policy is more humane if it involves less short term economic discomfort for society has long been the view of many in Europe, and Keynes himself would be turning in his grave as the economics of Europe turn against his economic model.
To stay in the Euro, Greece must make widespread
economic reforms in days, let-alone months or years, which will have
devastating effects on the short term economic plight of the Greek people. However,
according to the economic norms of today this will provide the grounding to
support economic health in the long run, will it work?
It took Leszek Balcerowicz three years to perform the
sweeping reforms in Poland which went further than the European Commission has
ever demanded from Greece. The reforms made during these three years of pain
have helped Poland to become a powerful competitive economy which has enjoyed
23 years of economic growth. At the time his policies were derided by many in
the liberal West as 'shock therapy', a pseudo-science which brought pain and no
benefit to the patient- this is patently incorrect. Today, we can see that the
threat to ordinary people lies in homoeopathic economic policies which feign
assistance but in fact allow the patient to continue their decline. Francois
Mitterrand and the European Commission both raised their concerns over the
accession of Greece to the EEC prior to their admission. Amongst other concerns
particular unease was based around their antiquated tax collection methods;
their poor judicial enforcement; and the clientelism of swapping political
support for business support in certain industries. All of these considerations
were overlooked for the sake of the political paradigms of the Cold War and the
drive for the democratisation of Europe. Following their accession, Greece
proceeded to endure a decade of anaemic growth as their industries struggled to
compete in the open market. The question of reform was raised once again at the
European level in the 1990s as the issue of their admission to the Euro was
discussed. Greece was ultimately accepted to the Euro after producing
fraudulent accounts and promising to make reforms which they had originally
promised to make in 1981. Upon each of their bailouts further promises were
made and then broken.
Solidarity is rightly a key component of the European project. It is a necessary remedy to the cold transactional nature of economic and political management of a continent. Solidarity is why 1 million babies have been born by parents who met on Erasmus. Solidarity is why Europe now looks within itself when war troubles its borders. Solidarity is why European countries were bailed out by their equals- other European states. However, solidarity is felt for people, not for regimes. Like most of Europe I have felt heartbroken by what my fellow Europeans in Greece have gone through since the economic crisis. However, this is not the only face of Greece. The other face of Greece is the 50,000 Swiss bank accounts in Greek hands; the large property portfolios held by Greek families in London; the Greek registered yachts which pepper the Mediterranean from Larnaca to Nice.
The ancien régime held power across a range of state supported sectors including; protected markets for everything from milk to electricity generators; lower taxes for their shipping and tourist businesses; and generous pay and pensions for the military elite. Paradoxically, even l'enfant terrible of Greek politics Syriza fought tooth and nail to keep these privileges of the well-off elite. Today Greece is on its knees having suffered the shame of losing a high stakes poker game in which they held the short hand. However, the good news is the old elites have now been forced from the table as the troika has no interest in supporting the whims of Greek shipping magnates or retired Generals.
Greece will be shocked back to life in a new form, finally ready to repair the damage the homeopathic remedies failed to cure and will return once again back to the bosom of Europe.