Raúl Ilargi Meijer has made the Greek situation his focus the last month or two on the website automaticearth.com. He has had some good insights, although he apparently believes that the suffering of the Greek people justifies more European taxpayer largess. Yes, it is unfortunate, often heart-rending, that old people, their pensions cut, are digging in garbage cans and Greek hospitals and doctors lack necessary supplies. However, when your government spends more than it takes in for years, is corrupt, and fails to collect taxes, those sort of bad things happen. America will find out about it soon enough. When the shit really hits the fan, there won’t be enough money, even the kind conjured from thin air, to alleviate all the misery coming Europe and America’s way.
However, in this article, Meijer suggests an interesting possibility: that Alexis Tsipras has maneuvered his way brilliantly through the crisis, from the standpoint of both the negotiations and domestic Greek politics. He was elected in January with less than 40 percent of the vote. The electorate wanted to stay in the EU, but to forego austerity. The referendum gave him a mandate to reject further austerity. Tsipras then essentially agreed to the austerity package his voters had just opposed, contingent on some sort of debt reduction and restructuring. The IMF, one member of the hated “Troika,” had, just before the referendum, said Greece’s debt was unpayable and would need to be reduced and restructured, putting the IMF in opposition to the other two members, the EC and the ECB. Now, apparently, led by the Germans, Dutch, and Finns, the EU will not grant any reduction other than tweaks on maturities and interest rates, and are “suggesting” that Greece leave the Eurozone.
Tsipras is the same position as Lincoln after Fort Sumter or Roosevelt after Pearl Harbor—he has got the other side to fire the fateful first shot. He can claim he was willing to meet the EU’s demands, but it was they who initiated the Grexit. He will not be blamed in Greece, and he can, like Lincoln and Roosevelt, rally his country around him for the undoubtedly tough times ahead, provided there actually is a Grexit and not some 11th hour, can-kicking agreement. Then, if Tsipras is really smart, he’ll pull a Nixon goes to China, swear off socialism, embrace free markets, low taxes, protection of contract and property rights, and minimal regulation. In 10 years Greece would be on its way to becoming the Hong Kong, rather than the Venezuela, of the Mediterranean. This is an extremely low-ods bet, but it sure would scare the hell out of the rest of Europe.
From Meijer, at automaticearth.com:
Too many voices the past few days are all pointing the same way, and I’ve always thought that is never good. A guessing-based consensus, jumping to conclusions and all that. Look, it’s fine if you don’t have all the answers, no matter how nervous it makes you.
What I’m referring to in this instance is the overwhelming conviction that Greece and Tsipras have conceded, given in to the Troika, flown a white flag, you get the drift. But guys, the battle ain’t over yet.
So here’s an alternative scenario, purely hypothetically (but so in essence is the white flag idea, always got to wait for the fat lady), and for entertainment purposes only. Let ‘er rip:
Tsipras, first through holding a referendum, and then through delivering a proposal that at first sight looked worse than what the Troika provided before the referendum, has managed a number of things.
First, his domestic support base has solidified. That’s what the referendum confirmed once more. Second, he’s given the Troika members, plus the various nations that think they represent them, something that was sure from the moment he sent it to them: a way to divide and rule and conquer the lot.
Tsipras has set the IMF versus the EU versus the ECB. Schäuble snapped at Draghi last night: ”Do you hold me for a fool?” Germany itself is split too, Merkel and Schäuble are at odds. Germany and France don’t see eye to eye anymore. The US doesn’t see eye to eye with any party involved.
Italy is about to tell Germany to stop its shenanigans and get a deal done. The True Finns may get to decide the entire shebang, with less than 1 million rabid voters calling the shots for 320 million eurozone inhabitants.
From that point of view, Tsipras has done a great job at playing the other side of the table off against each other. So much so, it doesn’t even have to have been intentional, and it still works out great. He’s exposed the entire EU structure as a bag of bones, let alone a naked emperor.
Moreover, imagine this also purely hypothetical and for entertainment purposes only notion: maybe Tsipras has known forever that for Greece to stay inside the eurozone was a losing proposition. But he never had the mandate. Well, after Schäuble’s antics last night, that mandate has come a lot closer. And it’s not even just in Greece either.
And he may not even need such a mandate: Schäuble may do the job for him. If Tsipras pokes him just a little more, he’ll throw such a hissyfit that Alexis will be able to get Greece out of the euro without carrying the blame himself. And get money for the effort. Lots of money.
And that’s not all: he’ll sow division in the ranks to such an extent that the whole EU won’t survive. How can Schäuble stay in his post after this? How can Draghi? He’s shown them all, for the whole world to see, to be nothing but hot air bags of bones. Their entire credibility is shot to bits.
To continue reading: Tsipras Invites Schäuble To Fall Into His Own Sword
