Foolishness to the Greeks
Why they ever ditched their ancient drachma – the currency of Plato, Ptolemy and Alexander the Great – is a mystery, and evidence – if any were needed – that they don’t deserve the Elgin Marbles. A nation which squanders its sovereignty without regard for its unique heritage as the cradle of Western civilisation – the birthplace of democracy, the fount of Western philosophy and literature, the creator of the Olympic Games, the originator of historiography, political science, mathematical principles, and our dramatic traditions of tragedy and comedy – does not deserve much sympathy for its economic woes.
Why Greece ever joined the euro is all Greek to His Grace.
The introduction of the euro artificially decreased the interest rates of many EU members countries, in particular those with a weak currency. The countries who benefited the most from this decrease were Greece, Ireland, Portugal, Spain, and Italy.
And which countries are now suffering intolerable deficits, up to 10 per cent higher than the 3 per cent budget deficits permitted under the Maastricht criteria?
But the obvious solution appears to be all Greek to their prime minister.
Believe it or not (and Cranmer does not), there has been no EU agreement to support Greece financially, because they have not requested it.
Instead, they have appealed for ‘psychological and political support’.
Well, it’s too late for the couch – nine years too late in the case of Greece. If you deceive and lie your way into ‘the heart of Europe’ by concealing your character flaws and suppressing your true profligate nature, you can expect a little clinical depression and occasional suicidal feelings. It isn’t as though the psychologists did not warn of this.
President Van Rompuy is strutting his Gollum-like stuff and has declared: "Euro area member states will take determined and co-ordinated action if needed to safeguard stability in the euro area as a whole. The Greek government has not requested any financial support."
What he did not mention is that they do not have to.
Article 122.2 of the Lisbon Treaty states: Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional circumstances beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned.
And this burden falls on all member states, not simply the eurozone members.
So when Chancellor Merkel of Germany demands that Greece should put its own house in order, it is for her domestic audience: she is fully aware (as she has said) that ‘Greece won't be left alone’.
When Prime Minister Gordon Brown says there are arrangements for ‘global assistance’ which were agreed at the G20 summit, he is fully aware that a bailout for Greece will cost the British taxpayer.
When Chancellor of the Exchequer Alistair Darling says there is no plan to use UK taxpayers' money to support Greece, he knows full well the plans are already written and the consequences unavoidable.
As the Great Lady said, ‘You can’t buck the market’.
Financial traders simply have no confidence in French and German ‘psychological support’, and so they will continue speculating that Greece will fail to solve its financial woes.
If their bets continue, the problem will not simply be a matter for the Greeks, but also the Spanish, the Portuguese, the Irish and the Italians.
And then it becomes a problem for the eurozone.
And so it becomes a crisis for the European Union.
And the collective will bear the burden because the collective is legally obliged to do so.
And, bizarrely, while Greece now struggles to survive amidst public sector strikes, austerity measures including pay freezes, tax hikes and extensions to the official retirement age, soaring unemployment and civil unrest, Lord Mandelson still believes the UK should join the euro.
While David Cameron has said ‘never’: "I was in the Treasury when we were in the Exchange Rate mechanism, and I said to myself: 'Never again should we give up control of our domestic interest rates.' If I am Prime Minister and for as long as I would be Prime Minister, I would never take Britain into the euro, full stop, end of story. We should never have got ourselves into the financial mess that we are in but at least we have the flexibility of our own currency and our own interest rates."
Spoken like a true Whig.