Nemesis might await both the Greeks and the Eurozone

Keith Hudson

So, as expected, Tsipras has decided to call a referendum.  As a politician, he won’t want to lose power so a referendum will be better than a general election — when he might be booted out.  On the other hand, 5 July gives . . . enough time for the electorate to switch around from their present wish to remain in the EU to leaving it.  That’s what happens frequently with large numbers of people.

What you can be certain about is that European governments and the media will be flying in large numbers of observers from today onwards to find out as precisely as they can as soon as they can what the mood of the crowds are, and might be on 5 July — and, of course, what the middle-classes, who don’t normally turn out in street demos, are also thinking.

And, if there’s any possibly of a turn-around in favour of leaving the Eurozone, will the European governments be as reconciled as they seemed to be on Monday last towards Greece leaving?  Or will they carry out a coup d’etat against Tsipras as they did with Papandreou in 2011?.

And will the European Central Bank break even more rules than it has done already and continue to supply emergency money between 30 June (when bail-outs are due to expire) and 5 July?  Or, if it doesn’t, will the ECB decide that world opinion might turn savagely against it?  If it doesn’t, will cigarettes do as an currency during those days — or until the printers can overprint a “D” on existing euro banknotes?  Interesting questions!

The Greek people, particularly young Greeks, have gained a lot of sympathy in European public opinion — and among financial journalists — in the last few months.  They all agree that the Eurozone just hasn’t worked.  If, however, the Greeks decide to vote in favour of remaining within the Eurozone on 5 July, then I think they’ll lose that sympathy and they’ll have to face many more years of oppressive treatment by the IMF, the ECB and the EMU.  Paradoxically, the  Eurozone might find itself facing a huge rise in all the extreme right-wing parties in Denmark, Germany, France and italy (and even the relatively genteel Ukip in Britian!), not to mention the less advanced countries.

Nemesis might await both the Greeks and the Eurozone — the Greeks for being too welfare dependent, the Eurozone for being too welfare profligate for the sake of its idea.

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