THE GREEK DEBACLE: A COMMENT

"Greece’s ruling Syriza party erupted into rebellion and recriminations on Wednesday as prime minister Alexis Tsipras appealed for support for a new bailout deal that will heap more austerity measures on the country. In a sign of the tensions before a key parliamentary vote, radical leftist demonstrators opposed to further cuts hurled petrol bombs outside parliament and riot police used tear gas to disperse protesters, whose numbers had swelled to more than 10,000. Mr Tsipras was expected to prevail in the vote, scheduled for some time after midnight in Athens, with the help of opposition parties keen to grasp an €86bn bailout package to prevent Greece from crashing out of the eurozone. Still, the backlash from his own party could see more than 30 MPs rebel against their leader. Widening rifts within the leftwing, anti-austerity party also seem likely to force Mr Tsipras to reshuffle his cabinet to keep Syriza together in the aftermath of the vote. In a sign of the potential threats to the stability of the Greek government, more than half of Syriza’s Central Committee signed a letter opposing the deal and slamming it as a “coup”. Nadia Valavani, deputy finance minister, also resigned. “The solution imposed today in such a depressing way is not sustainable for the Greek people and for the country,” Ms Valavani said in a letter sent to Mr Tsipras on Monday and made public on Wednesday. Addressing his unruly party, Mr Tsipras called on MPs to maintain unity given the gravity of the situation, and asked them what they would have done instead. “I exhausted all possibilities and looked at all the negotiating solutions. Tell me what is the credible alternative that I did not think and did not say?” he asked".

Christian Oliver and Henry Foy in Athens and Peter Spiegel, "Syriza splinters ahead of crucial vote on Greece bailout deal". The Financial Times. 15 July 2015, in www.ft.com

"I had a long conversation today with Mr Hudson on his return from Athens where he has been serving as first secretary to our Legation. He emphasised the extent to which the Government were replacing the efficient Venezelist officers and officials by incompetent Constantinist [sic] amateurs. He is afraid that if some action is not taken in the near future the whole executive machinery will be irremediably ruined, and complete disintegration will set in. His views merit attention in that he was the only one of our officials in Athens who consistently forecasted the present crisis. I venture to urge the following considerations: (1) The Greek people, rightly or wrongly, are under the impression that in the end we will come to their assistance. At our request they are maintaining eight divisions of 150,000 men in all in Anatolia at the cost of two million drachmae a day. For the last two months they have been doing this on their own resources in order to convince us of their good faith....They know that they cannot hold out much longer, and that we shall be forced to show our hand. They are confident of the result and they look to us to appear as the friend and Protector of Greece....But if we really intend to help Greece we can only do so by positive action, and all negative compromises merely afford the French and the Italians an occasion for overt or subterranean opposition. (3) By 'positive action' I mean something like the following: - send someone to Greece at once to get into touch with King Constantine and to inform him that we shall be prepared to afford him support under certain conditions.... (4) I fully realise that the above suggestion may appear drastic. My point is however that unless we do something drastic the situation will collapse of itself."

"Memorandum by Mr. Nicolson on the Greek situation". 8 January 1921. In Documents on British Foreign Policy, 1919-1939. First Series, Volume XVII: Greece and Turkey, January 1, 1921-September 2, 1922. Edited by W. N. Medlicott, Douglas Dakin & M. E. Lambert. (1970), pp. 7-8.

The rather hectic and indeed almost unprecedented changes in the Greek situation is almost breathtaking. First the idiotic and ultra-gauchiste Syriza government rejects the proposed extension to the bailout programme by the troika and instead has insists upon a referendum by the Greek people to vote on the matter. Which to my own great surprise the Greek people, taking leave of their senses once again, voted in accordance with the wishes of the Syriza government and rejected the last bailout offer by the European Union and its partners of the IMF and the European Central Bank. When predictably enough Brussels announced that it would not offer Athens any further concessions and indeed hardened its stance on the negotiations with Prime Minister Tsipras, the latter only to my surprise staged a very quick climbdown at the very last second and agreed to an even more onerous, nay perhaps more accurately much more onerous bailout formula. Indeed as per the EU Observer:

the deal represents capitulation on nearly all points for the left-wing Greek government, which was elected on a platform to stop austerity and which, just one week ago, held a referendum in which Greek people rejected creditors' demands 1.

In short, financially at least, the radical Syriza government has been almost completely fettered in exactly the way that that most elegant and timeless of diplomats, Harold Nicolson suggested almost one-hundred years ago. Unfortunately, Nicolson's advice was rejected at that time by the more august and perhaps cynical mandarins of the Foreign Office 2. Thankfully, his European Union successors have successfully managed to implement his programme. Of course it is probably the case that as advocated by the IMF, the bailout programme should also include at the very least some degree of debt forgiveness 3. If not perhaps immediately then in a few years time, once the Syriza government or whoever (hopefully) succeeds it, manages to implement the needed reforms which Greece's almost completely corrupt and inefficient governmental structure and the society which supports it, cries out for. But for that the sooner that the Syriza government is ousted the better. In that respect if nothing else the hardline pursued by the European Union and Germany in particular has been quite praiseworthy.

1.Honor Mahony, "Greece capitulates at EU summit". EU Observer. 13 July 2015, in www.euobserver.com.

2. See as Minute by the Permanent Under-Secretary of State at the Foreign Office, Sir Eyre Crowe, dated the 10 January 1921, in Documents, op. cit., p. 9.

3. Shawn Donnan, Peter Spiegel, "Latest IMF debt relief push baffles eurozone creditors". The Financial Times. 15 July 2015, in www.ft.com