Boris Johnson is in Greece, to garner some first hand information on the Greek crisis. In the Daily Telegraph today, Boris writes:
“That is the great thing about the English,” said the Greek elder statesman – and I pricked up my ears. There is nothing nicer than a compliment from some well-travelled foreigner. He went on: “The English know how to…” And my mind raced. The English know how to do many things, but we cannot claim to have a monopoly of wisdom. The Italians are pretty good at making ice cream. The Germans know how to make machine tools. The Americans are so far the only people who know how to put a man on the Moon. What is our special subject in the global mastermind competition?I waited, with bated breath. Do we know how to cook, how to fight, how to make love, how to brew a nice cup of tea? Of course we do – but do we have such knowledge more abundantly than any other 21st-century country? “The English,” he repeated, putting me out of my misery, “know how to vote.” And – ah! I saw what he meant. I have been in Greece for about 48 hours, in order to conduct some first-hand research into the euro crisis. I have been amazed by the general level of pessimism among intelligent, professional Greeks.
They look at the recent UK elections, and they say they are full of envy for the British population: because we voted so decisively for the Conservatives and common sense. They look at their own government, and they shudder. They have a sense of impending doom, they tell me – and at first you wonder why. You go to the Cyclades, and you can’t see any reason why the Greeks should be jealous of us. It looks like paradise, at least from where I sit here in my taverna with my flagon of retsina. There are helicopters thwokking through the sky as they take Greek billionaires to their luxy villas; there are Greek playboys and girls biffing their high-speed powerboats over the wine-dark sea; and there is an endless procession of planes arriving from the less sunny and less fortunate parts of Europe, full of pasty-faced tourists lusting to spend their euros and pounds.
This is Greece, for heaven’s sake, the fountainhead of European civilisation and democracy, where Phoebus rose, where Delos sprung. What can possibly go wrong? It seems incredible that we can still – five years later – be talking about the risk that Greece will manage to eject itself from the euro. It is unbelievable that the collective brains of the EU and the IMF should have failed to sort this out. And yet it could indeed go wrong: that is the view of the Greeks I have talked to in the past couple of days. Through a mixture of impatience and irritation and sheer incompetence on both sides we could see the Greeks accidentally-on-purpose hitting the red button and kapow! They could be blasted through the canopy and out of the European cockpit and end up landing back in the Russian sphere of influence.
It seems bizarre that the world is risking this geo-political convulsion, when the sums at stake are so relatively small. Next month the Greeks must pay back about £1.5 billion that they owe to the IMF, and, as of Sunday, they were being mulish about it. At least one Greek minister was quoted as saying that they couldn’t pay, wouldn’t pay. Go whistle, he said.
If he is serious, he means that the Greeks are finally going to default; and what happens then will all depend on mass psychology – on what that default will mean not just to their creditors but to the Greeks themselves. According to the gloomsters, the Greeks will take it badly. They will decide that it is conclusive proof that they can no longer manage their own affairs, and that their government cannot be trusted with anybody’s money; and having briefly uttered a Sophoclean wail they will go to the banks to withdraw their cash.
The current bank “jog” will become a run, and then a stampede. The Greek banks will be neither solvent nor liquid, and the only hope would be some further bail-out from the European Central Bank – and the thinking now is that Mario Draghi, the governor, has exhausted his options. To pour more money into Greece would be neither legal nor prudent – and a bit of an insult to all those European countries that have done the right thing and paid their debts. The Greeks are already desperate for cash, to pay their pensioners, to pay public servants – even to pay for medicines.
Greeks are suffering hardships now that we can barely imagine. Faced with a banking meltdown, and no more cash from Europe, they would have no choice but to reinvent the drachma, print money, and take back control of their own affairs.
It would be horrendously difficult, and painful, and it would probably involve hyperinflation and a long period in which no international lenders would go near the place. The Greeks would almost certainly find themselves drawn closer to Putin and Moscow – with all sorts of baleful implications. The contagion might indeed spread to other eurozone countries. We surely can’t let it happen. But what is the alternative?
The only other way forward is for the Greeks to swallow the German medicine, no matter how nasty it tastes. They will have to make the reforms they have dodged for so long; they will have to purge their bureaucracy of the Byzantine non-jobs; they will have to get people to pay their taxes and to obey the law. In a word, they will have to become a little less Greek and a little more German – and it will hurt. On Sunday morning I tramped with the sunburnt hordes through the holy precincts of Delos, and I remembered how the Delian league had evolved from a brotherhood of sovereign states into an Athenian empire.
Today it is the eurozone that is becoming an empire, and Germany the semi-reluctant hegemon. That is the choice the Greeks must make: between a painful and perhaps chaotic independence; or a grinding economic subjection, endured in the hope of long-term behavioural change. Either course will require leadership of a high order. They will have to know how to vote.”