Under the official forecast, the economy will contract by a further 4.5pc next year, so it fair to assume that lots more people are going to lose their jobs. It is certainly not going to improve in any meaningful way for years to come.
This is what happens when you lock into the wrong currency and block the escape routes – or join a "burning building with no exits" in the words of William Hague.
Even if Greeks comply with all demands, public debt will reach 179pc of GDP next year. Perhaps there will be some sort of formula to cut debt service costs by shaving 50 basis points off interest on rescue loans, and persuading the ECB to forgo "profits" on its estimated €40 billion holdings of Greek bonds (though unrealised profits would seem be courting fate).
Yet it is hard to see how the salary and pension cuts, etc, pushed through the Greek parliament last night with enormous difficulty can do any more than buy a few months’ delay. The protests on Wednesday bordered on urban guerrilla warfare. It will not take much to cross that line.
Even if the EMU machine succeeds in keeping Greece in the system, is this any longer a remotely desirable goal? Has it not become a vicious and immoral policy in itself?
I agree with the IFO Institute’s Hans-Werner Sinn that upholding euro membership has by now become an act of cruelty. It not being done in the interests of Greeks. It is being done for the Project, by enforcers of the Project. Only by breaking free can Greece restore a minimum of economic vibrancy and national dignity.
Everything we know from labour studies is that the early twenties are crucial years, shaping lifelong career paths and earnings ten to fifteen years beyond. The worst economic crime you cannot commit is to leave 58pc of youth grinding away their days in frustration in cafés, if they can afford the coffee.
Premier Antonis Samaras issued hysterical warnings before the vote of what would happen if parliament refused to obey the EU-IMF Troika, talking of catastrophe and a collapse of Greek society. He has little credibility. His party was chiefly responsible for the grotesque mismanagement of Greece in the early EMU years. There is no necessary reason why Greece should spiral into collapse outside EMU, or why the Drachma would plummet to Third World levels.
This would happen only if the EU decided to make that happen. Why would the EU behave in such a fashion? It would have every reason to try to salvage what it could from the fiasco and demonstrate that EU solidarity is still worth something. Technically, the ECB could be instructed to defend a euro-drachma rate – let us say a 30pc devaluation – until the dust had settled.
The EIB and Commission could intervene with all kinds of investment and trade support to cushion the blow. An orderly transition is not beyond the wit of man. It would restore the basic competitiveness of the Greek economy at a stroke.
We all know the reason why this is not being done. The ideologues running monetary union cannot bring themselves to contemplate any step back in the Project, just as they would not admit yesterday in the Commission’s economic report that they have gravely misjudged the effects of fiscal tightening (the fiscal multiplier) and have therefore miscrafted their entire austerity strategy. We are not dealing with rational people. We are dealing with a religious order, and these monks are becoming an increasing danger to Europe’s societies and democracies.
Margaret Thatcher’s advisers were tagged Sado-Monetarists in the early 1980s but they never inflicted anything remotely close to this level of suffering. The strange silence of the Left on this is baffling. Sooner or later my Fabian friends will have make up their minds whether they are for the workers, or for the "bankers ramp" — as old Socialists like Peter Shore used to describe monetary union.
The Draghi Put has lifted the immediate financial threat, but this makes matters worse. The drip-drip of ugly economic data continues each day. The deeper structural crisis is still getting worse. Loan demand has crashed 50pc in Italy and France. Spain’s unemployment is 25.8pc and may reach 30pc next year.
Yet there is no longer any immediate catalyst or external umpire in the markets that can bring this mass civic abuse to an end. Unless the Bundestag comes to the rescue by refusing to pay for any more can-kicking, we may have to wait until internal devaluations in the Club Med bloc push jobless rates to such excruciating levels that the political system snaps.
It is the worst of all worlds.
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