One can only say, “I told you so”, if, as the Americans would say, one puts it on the record. However, as far as my small audience (in the pub) was concerned, I told them so around Easter 2012. The Greeks, welching on their bond repayments, killed a project I was due to manage in Tajikistan because the Hong Kong financial backers had got the jitters over the Euro. This small Mediterranean country’s default was rippling around the world and they (the Greeks) had to know it would. Moreover, what did these 2012 defaults and subsequent warning signs indicate to our cognoscenti? Or, in the last 3 years I have obviously missed reporting and opinion of, well, the obvious…
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This was a very big (and probably very intentional) warning that was essentially ignored and all sorted out with some EC/ ECB/ IMF gaffer tape and so back to business as usual. Overheard in a Frankfurt beer cellar (summer ’12), “Mario, just chuck some money at them and tell those Greek idiots to stop messing us about…”
Ha Ha, but you are losing interest because we all know this, now. What you are forgetting is that a primary school has to burn down killing lots of children before fire regulations are changed “to prevent this tragedy ever happening again”. However, the head mistress who installs a sprinkler system because she sees a potential future catastrophe is berated for wasting taxpayer’s money.
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Also, I am not a vulcanologist but if a nearby normally peaceful hill starts to occasionally shake and vent ‘bad egg’ smelling steam most of us would grab a few bags, shove the kids and the dog in the back seat and push the pedal on the right all the way to the floor. I say, “most of us”, and here’s a thought. There are hundreds of body casts in the ruins of Pompeii. Could they all be of 2000 year old political peacocks and rapacious bankers?
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It would be naïve to think of Messrs. Tsipras and Varoufakis (don’t forget him) as blundering buffoons in their previous Brussels negotiations. I suggest that they are two very savvy blokes (ie men of the people) with sequentially phased plans A, B and C, conceived between last January and March (when Syriza was conspicuously quiet after their BIG win, you may remember).
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It must be assumed that nothing either of these men has done in the last six months has been off the cuff. Rather, more choreographed than the Evzone guards outside on the Parliament steps. Let us reason that this has been the case.
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Since Mr. Varoufakis’ resignation to generously “assist the post referendum negotiations” he and Mr. Tsipras have maintained a respectful public distance. There was no uproarious and acrimonious departure because (maybe) they still meet behind the Hellenic Parliament bike shed for a smoke and a conspiratorial giggle.
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Plan A needed some initial groundwork. Some jingoistic sabre rattling is always great to keep Joe Voter riled up and on side and a little mischievous flirting with Uncle Vlad in St. Petersburg could only help in loosening some bowels around Europe and the US. Bravely, in the heart of the Berlin Chancellery Tsipras’ demand for nearly quarter of a trillion Euros in war reparations from Germany would have the old fellas toasting their young hero in the bars of Athens.
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This led to the unsurprising IMF default/ “delay” (sic) and then steaming into Brussels with Tsipras playing the relatively calm and reasonable politician while Varoufakis as the flailing banshee Marxist economics professor. Their requests to the then Troika were intentionally barmy and, always mindful of the Plan B soon to come, they played the negotiation game to yet another deadline in their good cop bad cop roles. Neither could have believed that the ECB, EC would simply roll over during these discussions. The IMF was probably the best chance Greece had at this point but the ECB/EC would have had the last word. It’s almost comedic that during IMF involvement in local (Brussels) negotiations they don’t speak out of turn but when safely back in Washington they become less timid…
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It should be remembered that the ECB fundamentally breaks every aspect of human existence down into numbers. Operating within the European bubble of relative predictability the Greeks had again presented problems outside the ECB’s comfort zone. On the other hand, the IMF’s experience is with the more “challenging” nations of the world and so far more pragmatic and realistic. The EU members are headed by precarious politicians and, no matter what their personal gut feelings may be, they have to keep their own Joe Voter on side.
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Plan B was therefore 90% inevitable. This was the referendum that appeared plain crazy to, well, everyone. It’s not so crazy if we had known it was planned many months before. Can anyone remember how fast it was pulled out of the hat at the break up of the negotiations? Almost as if the Athens ballot printers were just waiting to be switched on and the temporary polling stations pre-booked. Could the UK sort out an organised snap national vote inside a week? This referendum became what it was intended for at the earlier winter planning B stage regardless of any idiotic ballot wording to keep the smoke swirling for world press sound bites and misplaced conjecture. A pure nationalist vote of confidence in Tsipras and Syriza. How could he lose it? A real hero David versus the evil Goliath.
Varoufakis threatened to resign if the vote was lost. Theatrical showboating but introducing the idea of the resignation he was planning after the “No” vote. His disruptive work in Brussels was done.
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Plan C subsequently began and continues now, bringing the final chapter of certain Grexit. With Mr. Varoufakis graciously resigning for the good of these bailout negotiations (yawn), Mr. Tsipras is now with his new outwardly obsequious team. The pantomime of ushering the cloud cuckoo deal through the Greek parliament is done. All media talk now revolves around its “workability” or lack thereof, and the “fragility of success”. What rubbish..! Just a perfect misdirection.
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Greece is now entering its most certain period of the last few years. The only time in (maybe) a generation that the country’s leaders actually have a proper plan. The uncertainty over the Euro probably left Messrs. Tsipras and Varoufakis about a year ago. They realised that, for Greece, the Euro would soon be just a memory. I imagine this was a very liberating time for this small band of Greek patriots. First they had to get Syriza elected and then get as much as they could from the greedy Brussels bankers by what ever means they could before jumping ship. After all, the 2012 bailout money had run out and they needed some quick cash. ECB, IMF or Wonga? No difference as none would ever see it again.
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The IMF have been a win win for the “ABC Plan” in whatever it has said or done. As it is the bedrock global finance organisation the ECB and Commission can’t badmouth and dismiss its statements, whether “leaked” (more yawns) or not.
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A week before the referendum, on 28th June the IMF’s MD, Christine Lagarde stated, “The coming days will clearly be important. I welcome the statements of the Eurogroup and the European Central Bank to make full use of all available instruments to preserve the integrity and stability of the euro area. These statements underscore that the euro area today is in a strong position to respond to developments in a timely and effective manner, as needed.”
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On 14th July the IMF’s (post “leak”) statement read, “Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.”
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All this must be creating merry hell in Brussels and Frankfurt right now but these deluded Europhiles and grasping bankers will plough on. The all new genial Syriza Hole in The Wall Gang will carry on glad handing, smiling and promising to raise VAT to 50% and the retirement age to 87.
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In the next few weeks and months we will see the Greeks (very quietly) grab as much of the bailout as they can while quietly printing new Drachma notes. As a matter of priority the ECB is now transferring €7bn so the “muggings” Greeks can immediately pay interest debts to the IMF and ECB. Of course they will promptly pay this to get their hands on the major bailout lolly. The ECB will never see any of the €50bn asset fund outside of the country’s grip. The fund will stay in Athens much to Frau Merkel’s dismay and, when the end comes, this fund will be quietly reabsorbed.
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September, October, November as the Athens coffers are filling up nicely with dirty Euros, Tsipras and reinstalled Finance Minister Varoufakis will begin the ‘close out’ of Plan C . This will involve lots of spin and nationalism. Another ECB/ EC renegotiation will be demanded (not kindly requested) and the “stupid lefty bumpkins” will have the Germans by the throat.
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If we remember how organised they were at organising the snap referendum I wouldn’t be surprised if one Monday morning all of Greece’s ATMs started spitting out Drachma bills to the surprise of everyone (and no one). No joking here; it really can be that easy. What’s more, the (now relieved) Greek people will be throwing crockery and Zorba dancing in the streets…
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Certainly, the Grexit reported to us will not be one of deliberate hoodwinking. It will be cloaked in the face saving blurb that we Europlebs are usually spoon fed.
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If you can see it makes some sense that this was all a very smart financial coup brought to you by a bunch of unsophisticated commies led by Butch Tsipras and a balding Sundance Varoufakis you might raise a glass of Metaxa. For me, Kudos to them… Not as strange as you may think coming from a devotee of Our Lady of Grantham.
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Andrew North
a.north@gmx.co.uk
@andynorth10
BlueWheelyBin 