Yesterday, apparently, the IMF and the ECB have left Greece to flounder for another month in order to await Greek government decisions about taking further austerity measures and the selling of state assets. Obviously, the French and German banks which have large quantities of Greek eurobonds are not prepared to take a partial haircut. The IMF, the ECB and the finance ministers of the Eurozone are taking a bet, it would seem, that the Greek government, as it’s presently composed, will not default.
Also, America and China have no intention of allowing the Eurozone to fail if they can possibly prevent it. The big American banks have substantially insured the European banks against a Greek default. They can’t be allowed to run the risk of failure. As for China, it still needs a continuing smooth supply of producer goods from Germany, Finland and Holland to maintain its own economic momentum.
However, I have a tingling in my bones that the Greek Government, the Greek Parliament and the Greek People all want Greece to default from the Eurozone but only the rioting crowds dare say so openly. Greek politicians know, from the history of the Argentinian default in 2002, that defaulting on its debts and re-establishing the drachma is now the only way of Greece getting on an even keel again. However, they also know from the Argentinian default that, for at least a couple of years the country would be thrown into such economic chaos and widespread impoverishment that some sort of subsequent revolution would be highly probable. For many of them, that might well put paid to their future political careers!
The tingling in my bones started when Prime Minister George Papandreou re-shuffled his government on Friday. Among the new appointments was the large frame of Evangelos Venizelos and, from the little I saw of him on television, obviously a charismatic figure. He is the new finance minister. He was appointed in order to be Greece’s strong man at the IMF-ECB talks on Sunday. But was he also appointed because he’d formerly been Greece’s minister of defence? What are his relationships with the army generals?
Could it be that even Papandreou has realized that the anger of the crowds now gathering every day outside Parliament is now becoming so great that only the army can now deal with it? On Tuesday, when Parliament is due to have a vote of confidence, then, if it votes in favour of Papandreou — and the retention of Greece within the Eurozone — what will the crowds do then? Will they simply walk into Parliament and take over, as happened (successfully) in Georgia as recently as 2003? (The Rose Revolution) Or will the army be needed? Furthermore, will there then be a military dictatorship?
This would be unthinkable in most European countries, but not in the case of Greece. In 1967 America helped to institute the ‘Regime of the Colonels’ which lasted until 1974 when an even more brutal dictator, Brigadier Ionnidis took over. It was only when Turkey invaded Cyprus and humiliated the Greek Army that Ionnidis was overthrown and tried for treason in 1975. The point is this: how much does this still resonate in Greek culture. Or, rather, in the minds of the powerful non-Parliamentary elite groups in Greece when faced with the possibility of a left-inclined public service union take-over?
It’s just a tingle at present. Just a wispy thought. Otherwise there doesn’t seem to be the remotest chance of a solution that could keep Greece within the Eurozone.