Greece - purgatory postponed

Patrick Young
Patrick L Young is CEO of niche crowdfunding platform HanzaTrade and an advisor to fund managers throughout the world. Born in Ireland, he is an active investor in the “New Europe” amongst other emerging markets and is an active Co Founder of grassroots startup group "Mission ToRun." Home Page: http://patricklyoung.net Twitter: @FrontierFinance
Reuters / Alkis Konstantinidis
In an era of wanton government economic illiteracy, the latest case of ‘Kickcanistan’ mentality from Europe’s government caste has led to a political fudge ignoring economic reality allowing victory bleats by politicians with policies doomed to failure.

A February fudge is at hand. The troika and those raffish Greek government dudes agreed to a lifeline for Athens. Albeit nothing that tangibly resolves the crisis while the Germans and Greeks both trumpeted victory. In the final reckoning, once again European citizens lost. A demented doctrinaire approach by all parties generates a ludicrous specter of politicking. All the while Europe’s lost decade continues to accelerate.

In the final reckoning, Greece had to give ground as their economic fundamentals are just awful. Faced with the reality of Syriza applying the sort of left wing agenda which has most recently impoverished Venezuela and has a track record of zero successes in history - money is gushing out of Greece. Roughly a billion Euros a day has gone overseas since the election. Had Mr. Tsipras not endorsed a deal Friday, Greek banks would probably have run out of money within days.

Thus Germany’s Finance Minister Wolfgang Schauble was quick to claim victory with remarks aimed exclusively to his domestic audience. German voters have tired of spending their money on Greece’s corrupt dysfunction which masquerades as a modern democracy (whether Syriza can reform this is a fascinating issue but I won’t hold my breath).

Incidentally the agreement might yet run aground depending on the proposals Greece table to cut budgets during the next four months. After all, any notion of budgetary restraint runs entirely contrary to all the core Syriza mantras.

Ultimately this agreement amounts to little more than a sticking plaster covering festering wounds. The can has been kicked down the road demonstrating an ongoing inability within the EU to resolve problems. Ultimately, it must be clear that even if managed coherently (a large ask!) the Greeks are unlikely to repay their vast debts. Yet Syriza insisted on running an electoral campaign of economic juvenilia, suggesting Greeks could have their cake and eat it - or at least have their euro and eat the debt. This is unsustainable, even presuming that Greece can recover from its great depression (the economy remains 25 percent smaller than it was before the crisis). Thus Greece retains the un-alluring binary alternative. On one hand is the ugliness of the short sharp shock: exit the euro now and default...which at least ought to give growth a chance with a devalued currency. Alternatively - the path Syriza is now committing to -is a delusional notion that Greece can ever recover while in the straitjacket of a euro which hugely over-values, and hence throttles, export opportunities.

Delusion is not merely a Syriza stable - the EU apparatus maintains a ludicrous (and deeply callous) conceit aimed at sustaining the Brussels blob at the expense of citizens’ welfare. Unemployed Mediterranean masses are therefore tossed on the scrapheap of a lost decade cum lost generation. The euro remains a deeply flawed experiment which cannot work without a political union which EU citizens will not agree to.

Thus we see the current wretched fiasco where all parties have postured and plotted but ultimately indulged their ongoing denial of economic reality.

With each dawn we are one day closer to the euro denouement. A logical dismantling process is unlikely, given eurozone denial, suggesting the final act will involve a very brutal and vicious dislocation risking even greater economic damage. Meanwhile, the Greek people receive no benefit as prisoners within the straitjacket of a euro which is killing their industry and keeping a legion of citizens out of work. Perpetual instability is a given within the eurozone until the project itself dies. The ridiculous claims that the problems were resolved some years ago have been proven another fallacy of ‘Kickcanistan’ government era. Now we have four more months to watch the euro’s agonizing slow motion train crash continue to unfold.

Sooner or later Greece must face up to its debts with an orderly eurozone exit and default. Only weeks into their mandate, the Syriza government’s claim they can recreate a Greek paradise has given way to clear proof that however many times the can is kicked, the reality for Greek citizens is merely purgatory postponed. A wretched future cataclysm remains the likeliest outcome while all the politicians are prisoners to their own delusions.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.