A Letter From Home.

Late Thursday night into early Friday morning, Greater Athens was besieged by arsonists who, in separate incidents, firebombed a bank, a police precinct, vehicles belonging to the nation’s largest telecom corporation, and a court complex. No motive has been announced as yet.  But one can guess.

  

Unemployment continues to rage at levels higher than at the height of the United States’ Great Depression, private sector wages are depressed but hours worked are longer, public sector employment remains a politically protected sacred cow, systemic reforms to encourage local entrepreneurship and positive foreign investment are stymied by special interests, the best and brightest of the young continue to flee the country, taxes inexorably rise at unconscionable rates encouraging more to evade them, and corruption remains a stalwart of the system.

The icing on that sad, bitter cake is politicians promising things will be better soon. Though don’t look for sensible, rational explanations for why they say that.  Most cite to vibrant tourism statistics.  No one is precisely sure why tourism is up so dramatically, but it definitely is, and that’s very welcome news. But two—maybe three—months a year does not an economy make. 

George Orwell imbued his fiction with classic political misdirection techniques, a favorite being to find a foreign threat to blame when you’re at fault.  The populace loves blaming foreigners. The Greeks have seen that old chestnut floated by them regularly in recent years, the most popular villain being the Troika (IMF, EU, European Central Bank) who bailed Greece out from economic Armageddon in exchange for terms spelled out in the now infamous “Memorandum.”

“Blame the Troika,” has been the go-to position of Greece’s ruling politicians for explaining virtually all the country’s ills.  They’ve trotted out the same tune for so long people are tired of hearing it.  But the politicians are not.  In fact, they’ve grown to like it so much they’ve added a new lyric, one they once mocked as nonsensical and disastrous when it served solely as the theme song of the once marginal SYRIZA party: “Let’s tear up the Memorandum and abandon austerity.” 

Think of that financial planning technique as akin to an unemployed, down on his luck debtor who decides to inform his bank he will not be repaying his debt, but assumes there are other lenders out there who will ignore how he treated his bank and give him whatever he needs to immediately return to living the high life.  Unless your new creditor is a loan shark, good luck with that thinking.

It never fails to amaze me the lengths politicians (everywhere) will go to stay in power.  In Greece the ruling coalition faces an election as early as 2015, but certainly by 2016.  They’re frightened they may lose their well-paid positions of influence to SYRIZA, now the most popular party in Greece, so they’ve followed the traditional political wisdom of co-opting an upstart adversary’s popular position as their own and made getting out from under the Memorandum the core item on their get re-elected agenda.

Trouble is, no one seems able to figure out how to terminate the Memorandum without another cliché coming into play, “Tossing out the baby with the bathwater.”  The Greek economy being the baby.

One floated method was to substitute the Troika debt (borrowed at 4% interest) with funds raised on the international bond market. But the market doesn’t seem interested in taking the bonds for less than 9% interest. More than doubling your nation’s debt service obligation is hardly a sensible (or defensible) choice, even for politicians desperate to stay in power. Though it does give politicians a new villain to blame…those who control the international bond markets.

Another often-touted method is “hard negotiations” aimed at causing the Troika to capitulate in recognition of the reality of the situation.  Perhaps Greece’ negotiators haven’t noticed, but the EU isn’t exactly in the best of shape these days and its member countries’ patience is wearing thin on the topic of Greece. 

Some suggest playing the once reliable East versus West card—“if you won’t help us, we’ll have to turn to Russia or China.” That’s a very risky play.  What if no one cares and Greece actually does abandon its Troika obligations, choosing instead to mortgage itself to Russia and China.  Hmm, that loan shark image is surfacing again.

 

So what will happen?  I wish I knew.  Logic doesn’t seem to be playing much of a part in all this.  In fact, by the ruling parties adopting SYRIZA’s strategy they have effectively legitimized it as a party capable of steering the ship of state.  A rather rudderless one at the moment with promises, not action, serving as the primary fuel.

The reality is that no one believes Greece’s leaders any more. Not Greece’s foreign investors, not Greece’s journalists, not Greece’s people.

Here’s an on the ground reflection of how things stand at the moment in Greece. It’s taken from letter I saw a few days ago from a Greek living in Athens:

Hi, Happy return to NY! Must be so lovely with all the lights and festive spirit, you cannot imagine what a low-key Christmas season we are having here!

There's been sobering news from the Troika these last days (people very reasonably wanting their money back, tough shit for Greeks who refuse to change their crook attitude) and add the nightmarish idea of the idiot, hungry Tsipras [SYRIZA] coming to power, well, let's say celebrations are hushed...

The solution is simple to state: What the Greek people want is resolute, principled, honest leadership offering a viable plan for restoring respect and prosperity to their country.

Come to think of it, so do most in the US.  Good luck to everyone.

Jeff—Saturday