The Kroog is right (as usual) on the sheer bitter punitive structure of the EU/Greek deal: it’s a “deal” the same way that signing away your house, car and kids while standing on a trap door over an active volcano is a “deal”.
Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.
Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.
And the fine print is lethal here for Athens. The five-year Greek “time out” from the euro has been dropped in this morning’s final deal, but in exchange all the other eurozone demands have been capitulated to. Jacking the VAT up from 13% to 23% is just for starters, along with the country having to sign over some $50 billion in assets (maybe a quarter of the country’s GDP) over as collateral. Alexis Tsipras has to sell the rope to hang the Greek economy and get it done by Thursday, and maybe then Europe will talk about when Greece can re-open banks. And those bank capital controls? They aren’t going anywhere.
In a way, the economics have almost become secondary. But still, let’s be clear: what we’ve learned these past couple of weeks is that being a member of the eurozone means that the creditors can destroy your economy if you step out of line. This has no bearing at all on the underlying economics of austerity. It’s as true as ever that imposing harsh austerity without debt relief is a doomed policy no matter how willing the country is to accept suffering. And this in turn means that even a complete Greek capitulation would be a dead end.
Can Greece pull off a successful exit? Will Germany try to block a recovery? (Sorry, but that’s the kind of thing we must now ask.)
The birthplace of Western democracy is being raided, chopped up, and sold for parts. There’s no way Greece gets out of this without a lot of scars and bits and pieces missing, and frankly I don’t know what happens next if Greek lawmakers tell Tsipras to go jump in the Mediterranean. The one thing I do know is that this double secret probation austerity plan is going to fail like the other two Greek bailouts.
Here there be gorgons.