The Greek Tragedy: An Illogical Attachment to the Euro

The misery of austerity suffered by the people will be prolonged, and will cascade onto future generations. Greece's sovereignty and independence are being sacrificed for what?

Yanis Varoufakis, the former Greek finance minister, in an article in the Guardian entitled "Germany won't spare Greek pain - it has an interest in breaking us", frames the Greek tragedy in clear terms thus:

"In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend - restructuring the debt and reforming the economy; and the toxic option - extending new loans to a bankrupt entity while pretending that it remains solvent. Official Europe chose the second option, putting the bailing out of French and German banks exposed to Greek public debt above Greece's socioeconomic viability. A debt restructure would have implied losses for the bankers on their Greek debt holdings... EU officials presented the Greek state's insolvency as a problem of illiquidity, and justified the "bailout" as a case of "solidarity" with the Greeks. To frame the cynical transfer of irretrievable private losses on to the shoulders of taxpayers as an exercise in "tough love", record austerity was imposed on Greece, whose national income, in turn - from which new and old debts had to be repaid - diminished by more than a quarter."

However, he then dismisses the only viable solution, namely leaving the euro and returning to the drachma, as being too difficult. This unfortunately has been the Achilles heel of the Greek negotiating team. Syriza won the referendum; the Greek people decisively said NO to more austerity. They have voted NO in spite of the bullying by eurozone politicians, the European Central Bank (ECB), and the International Monetary Fund (IMF), warning them that voting NO means leaving the euro. Surely this is a mandate that clearly says - if you do not get a better deal then so be it, leave the euro.

Instead, it now seems that Syriza is asking the Greek parliament to accept more or less the same deal, maybe even worse, than that on the table before the referendum. This contradiction, combined with an illogical desire to stay in the eurozone, is being exploited mercilessly by international creditors. Syriza should follow the logic of its argument and leave the euro, otherwise Greece will be forever at the mercy of its international creditors.

The misery of austerity suffered by the people will be prolonged, and will cascade onto future generations. Greece's sovereignty and independence are being sacrificed for what? To remain in a system that puts its economy in a straightjacket with no escape route? It is now abundantly clear that Germany is demanding the total capitulation of Greece to act as a warning to the rest of the eurozone to toe the German line.

Nicholas Ridley, Secretary of State for Trade and Industry under Margaret Thatcher, in an interview in the Spectator in 1990, described the proposed European Economic and Monetary Union as "a German racket designed to take the whole of Europe". Could he have been right?

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