The end of the euro is nigh
Beware of Greeks bearing referendums. They might just be inclined to vote for liberty, for sanity, for social harmony. This will not be without pain, for they come with default on the nation’s debt, the re-birth of the drachma, and an awful lot of inflation and unemployment. But, the Greeks might say, at least it’s their drachma, their inflation and their unemployment: they will own it, because they are sovereign once again.
The EU’s political élite have wanted to avoid a plebiscite at any cost - literally. EU politicians have spent months assuring us that the bailouts are working; that Greece will not default. We, of course, knew otherwise. Greece is insolvent, broke, bankrupt: its government cannot repay its debts and will never be able to do so. Pumping in bailouts of billions of euros may make the country liquid for a time, but it is nothing but political sticking plaster. It will not improve solvency; it merely delays the inevitable.
And the inevitable duly came: Greece defaulted, 50 per cent of her debt was written off, and a trillion euros were dedicated to bank recapitalisation to prevent the contagion spreading to Portugal, Italy or Spain. As the world teetered on the edge of fiscal oblivion, the EU political élite and economic technocrats thrashed out a deal to save the euro. The bailouts were not to save Greece, but to delay the inevitable default. The élite expected the Greeks to be eternally grateful: Prime Minister Papandreou should have been proclaiming the Teutonic gospel of fiscal rectitude and bowing in adoration at the feet of his Madonna of Berlin.
But what does go and do?
He releases the Kraken. (Or, if you prefer).
The shadowy tentacles of a referendum now lurk under the Aegean. And it will thunder to millennial growth and height, battering upon the EU élite until the fire shall heat the deep. In roaring it shall rise and slaughter all oppression.
And that’s just a bit demotivational for the powers that be in Brussels and Berlin. Today (and for months to come) there will be apoplexy in the Bundestag.
If you were a Greek, what would you choose? A German austerity package which involved a 30 per cent reduction in your salary; cuts in your tax-free allowances; massive increases in indirect taxation; an extension of the retirement age; windfall taxes on every business; public sector strikes; soaring unemployment and civil unrest. Or a Greek package – not without its own pain – but which meant liberation from German oppression, ditching the euro and reprinting drachmas – the ancient symbol of Greek national sovereignty?
When you remove from a nation the right to set its own interest rates to suit its own domestic economy, in times of turmoil it is left either to tinker with taxation or slash spending. Since the people are not particularly disposed either to high rates of taxation or to cuts in their public services, disquiet turns into protests; protests become marches; marches become riots; riots become social turmoil. And social turmoil slips easily into civil war, which is precisely what Prime Minister Papandreou needs to avert.
To preserve the political peace and national security, he had no choice. Which is why, for the euro to survive, there must be a diminution of the sovereign autonomy of the nation state: you can’t have élite philosopher-kings beholden to hoi polloi. And so there must be fiscal union – a United States of Europe – with a single currency, a single bank, a single interest rate, a single taxation policy, a single economic policy, all under the ultimate authority of a single president who won't be accountable to the people or subject to the inconveniences of democracy.
And we await the man of sufficient stature to hold the allegiance of all people; the one who will lift us out of the economic morass in which we are sinking. Send us such a man and, be he god or the devil, we will receive him. As His Grace prophesied long ago, we are witnessing the birth of the euromark and the rise of a 10-nation euro-confederacy. The end is indeed nigh.