[NB The below may be considered a follow-up to my evaluation of the
Greek drama in February 2010, which you may see here on Colin Davies’s blog]
The publisher of my bestseller ‘A Crowbar to Keynes’ wrote to me the
other day (and that’s the first I heard from him since the royalties stopped flowing!) asking this simple but challenging
question: ‘Now that all options are open again, Dr Mittington, what should be
done about Greece?’
Forsooth a question worthy of a judicious reply! So I gave it some
earnest thought, and this is what I concluded ought to be done about Greece.
Greece should leave the Euro-zone. This is both morally and
economically justified.
It is morally justified, because Greece joined the common currency by
doctoring the books; because they broke every rule in the manual of sound
economic policy; and because they lied through their teeth for a decade to
cover up their frauds.
Economically it is justified, because once on the New Drachma, the
Greeks may devaluate, print money, set their own interest rate and negotiate
their own debt deals; all of them things which are basic to any return to growth,
and which within the Euro-zone they can no longer do.
People who know about such matters tell me that a gradual return to a
national currency may be accomplished without undue catastrophe or trauma, by
so-called ‘boarding’, i.e. pegging the New Drachma against one, or preferably
two, stable currencies (e.g. the Euro and the Dollar) for a set amount of time,
until the stormy waters have returned to their channels.
Others, who desperately want us all to believe that there is not, in
the entire universe and for the rest of eternity, an alternative to the Euro, to
More European Integration and to More Power For Unelected Beurocrats (guess who
these people are?) will tell you that an exit from the Eurozone can only lead
to catastrophe, disaster, war, pestilence and Armageddon. My answer is that such
a scenario will only happen if we allow it to. And there is a way around it.
So as to make an orderly Greek transition from the Euro to the New
Drachma possible, we will need to set up a full-fledged Marshall Plan for
Greece. We will need to help them with bucketsful of money, mostly in the form
of loans but also in the form of gifts. I will not lie to you: it will take hundreds of billions.
Oh, and now I can just hear all of you scream in furious indignation!
But hold your horses and think a while. Giving them money is undeserved, you say? We should not throw
our hard-earned cash at people who badly misbehaved? Well, for starters we are
already doing so, and with results which are less than splendid, in case you have
not noticed...
Secondly, ‘undeserved’ is a value judgement about the past, which
should not be a yardstick for the future. The Germans, for one, really ought to
know so. They themselves did not exactly behave exemplary between 1939 and 1945,
did they now? Yet good old George Marshall and the American leadership
nevertheless took the wise course at the end of the war, and spooned billions of
dollars onto the German plate, so as to built up the war-torn country and give
it a future. Yes, I am all in favour of justice and due punishment; but correct
policy should be shaped with an eye to the future, not with a hunger for
revenge. The latter we did in Versailles in 1919. And we got Weimar, Adolf Hitler
and the Second World War as a reward for our wisdom.
My dear fellow Europeans: I know the Greeks behaved badly. But we allowed them to behave badly, so the
responsibility is partly ours (and to a vast extend, incidentally, the blame
lies with the Brussels Eurogues, who so far have not been called to any account).
Beyond that, we have a simple moral duty as human beings. No matter
how undeserving the country, and particularly the political class of that
country, it does not do that we, affluent Europeans, visit devastation upon the
poorer Greeks, who are our continental cousins. Let us at least, by moral
generosity which rises above the petty blame game, guarantee health care for
the sick and reasonable pensions for the elderly. Let us make sure that the children
do not go without food, shelter or education. Let us give their young folk some
sort of future, and get the beggars off the streets of Athens.
This then is what wise leaders would do. Sadly, wise leaders are few
and far between these days, particularly in the corridors of Brussels Palaces,
where the perverse and the power-hungry go
have dinner together to speak of ways to stimulate growth… I wish I could
see the menu and the tab of that little Van Rompuy bash on May 23rd…
I wish they’d be fed the evening meal of a Greek old-timer, or the dinner of an
Athens beggar, harvested from dustbins…
Stop wrecking our democracies!
Stop repeating history!!
[Postscript May 13: for a similar view and a description of the mood in Greece, see this here article by Arianna Huffington]
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