Categories: Daniel Serwer

Grexit is no exit

Here is Greek Prime Minister Tsipras announcing Sunday his intention to default on the country’s International Monetary Fund obligations:

What? You didn’t hear the announcement? Welcome to the Greek hall of mirrors, where calling a referendum triggers default but is announced to the public as a necessary exercise in democracy, unjustifiably opposed by Eurocrats.

Timing isn’t everything in international affairs, but it does count. Had Tsipras wanted to go to a referendum, he needed to call it earlier than he did and schedule it in advance of the default deadline, which is today.

He is right, however, about fear. And Greeks have a lot to be afraid of. Their banks are closed and may never reopen in a euro-denominated economy. People are withdrawing as much as they can at ATMs. A “no” vote in the referendum will end Greece’s access to euros and force it to print drachmas again, which will plummet in value and impoverish the whole country. A “yes” vote may lead to fall of the government, an interim administration, and the austerity Tsipras was trying to avoid, with serious consequences for pensions and jobs.

I suppose Russia may come to the rescue with a big loan, but that is a fate I’m not sure I would wish on my worst enemy. Putin’s money comes freighted with conditions and cronyism. It also has to be paid back.

However this plays out, Greeks don’t get a way out of the predicament into which they have driven themselves. At best it will be years before a semblance of normality returns. Ordinary people who have worked hard and saved will pay the price. The politicians who created the problem and others who then failed to solve it will try to reap support from the resentment Greeks will justifiably feel. Greece may be leaving the euro (or not), but it has no way to leave its problems behind.

Grexit is no exit.

 

Daniel Serwer

Share
Published by
Daniel Serwer

Recent Posts

Failure and disgrace in 100 days

The Administration is weakening the United States. That is the only thing at which it…

2 days ago

Heading for Kyiv, thinking about post-war

This war should end with a prosperous, democratic Ukraine in Europe. If I can contribute…

3 days ago

Popular protests in Serbia target Vucic

The question is whether the demonstrators can exploit the moment to unseat a wily and…

1 week ago

What US aid will look like after USAID

US aid will be a cash cow for Trump donors, a mainstay of autocratic regimes…

2 weeks ago

A Passover for the Palestinians

Might makes right can work for a while. But in the end they will need…

2 weeks ago

The damage is vast and continuing

The simple fact is we were better off on January 19 than we are today.…

2 weeks ago