Dan Hannan, Greeks and Corsets

The crooked pie-eaters who run Greece have served up the usual offering once again today: “Give us the money we need but just a little bit more time to implement the cuts/reforms demanded.” This should ring a bell or two since we have heard this numerous times before. And each time the Greeks have got their dosh, so becoming more indebted, and then found excuses not to implement the reforms fully. At some stage someone must call their bluff.

Ever helpful Eurosceptic MEP Dan Hannan is again offering helpful advice to the Greeks, viz get out of the Euro. His thesis is that a drachma that collapses in value will provide such a windfall in terms of tourist income/increased competitiveness for Greek exporters of, er, um olives and er retsina and er, that is it, that the pie-eaters can then reform/cut away aggressively without risking a complete breakdown of society, unemployment of 50%, etc, etc. In a sense Dan is right. The Euro is a corset and Greece is better off out of it. But….

If the pie-eaters have no-one forcing them to reform they will not institute reform. The whole Greek political system is so based on bribes, supporting vested interests and similar arrangements that with no external pressure there will be no reform. Default and drachma will buy a two year window of opportunity but that opportunity will be wasted. And in two years time Greece will be back where it started. Uncompetitive, corrupt and the only way forward then is permanent mega-inflation (i.e. a drachma falling by 25% a year) to maintain competitiveness. In the end that route also ends in tears.

So Dan is correct in his thesis of what Greece should do now. But anyone who has read this blog during the past two months ( do a search for articles with a tag Greece if you have not) will have seen example after example of the Spanish practices (the old Fleet Street term which I am sure does also apply to Spain) which need to be ended at once. My fear is that without pressure from the Evil Empire and the IMF these practices will never end. So in a sense Greece has to stay in the Euro because its leaders are so woefully inept and corrupt. That is the great conundrum.