Almost incomprehensible
We are on record as saying a disorderly Greek default and exit from the euro, and possibly the EU, would be catastrophic for her citizens.
It is almost incomprehensible that the Syriza government, despite professing a desire to protect the social dignity of their fellow Greeks and to stay in the eurozone, has so manifestly failed to grasp what it needed to achieve in order to do so.
After all, Greece has not been alone in facing the grinding pain of austerity. The citizens of Ireland, Portugal and Spain have all had many, many bitter pills to swallow on this difficult path.
All of these countries now have growing economies, more stable fiscal positions, improved competitiveness and a real base on which to build the long, difficult road to prosperity that will allow them, over time, to address the painfully high unemployment with which they are cursed.
Fleetingly – ever-so fleetingly – Greece was on the cusp of joining this club. At the end of 2014 the economy had begun to grow again after a six-year recession.Joblessness began to fall, tax revenues to rise.
But in the end perhaps the pain was just too much. With general unemployment of over 26%, youth unemployment well over 50%, a risibly small tax base, a large black economy, rampant clientalism and a fractured political system, perhaps there was no way for Greece to stomach for so long the medicine the profligacy of its previous 20 years demanded.
The Syriza government has been a disaster. Growth has stalled, tax collection fallen, unemployment has begun to rise again. And now, the sour fruit of their months of negotiations is tasted on the very brink of the abyss.
The ECB has frozen its support for the banking system, forcing the Central Bank of Greece to impose a bank holiday until 7 July; during this period citizens may withdraw no more than €60 per card per day; companies are even more starved of finance than they were before; there is the real prospect that the government will default on pension payments on 30 June; and a referendum is to be held, the wording still unknown at the time of writing, on 5 July. In this the Greek people must in effect choose between biting further on the bitter bullet of austerity or the vast unknowns of exit from the euro.
