Greek Referendum

31 Oct 2011

Breaking News: Greek PM calls referendum on EU deal (in January!) (Reuters)

Since the latest Eurozone rescue was announced just three working days ago, Italian bonds have hit a new Euro era record high yield, European unemployment has hit a new Euro era record high, and the Greek Prime Minister has announced a January referendum on Greece's Eurozone membership.

European politics is totally and utterly dysfunctional, and the scale of its absurdity really sinks in when you realize that Greece is calling the referendum in January. The Greeks want the rest of Europe to sit around for the next two or three months waiting to hear whether or not they are going to stay in the EU, and the Germans are supposed to hand over another eight billion euros in the next few weeks, and the ECB is supposed to keep feeding Greek banks cash! Do you understand how inconceivably stupid this is? Do you understand why I talk about Greek politicians as brain dead bicameral mind zombies?

The irony of this announcement is that if Europe was run by professionals instead of Egyptian plumbers, we would have had a Greek referendum years ago. A Greek exit from the Eurozone is not the end of Europe, the end of Europe is Greece dragging everyone down by staying in the Euro and refusing to implement reforms. So European politicians should have forced the Greek people to choose between giving up sovereignty or exiting the EU a few years ago, and had they done so Europe would be in a much much stronger position today. If the Greeks had voted to give up sovereignty, their country might today be emerging back into the daylight after two years of radical reforms, as Ireland and Latvia are now doing. If, on the other hand, the Greeks had voted against reform, the exit costs would have be far lower and their struggle to survive outside the EU would have terrified the Italians and transformed the appetite for reform across Europe. Outside of the EU, Greece will probably become a European Bahamas, a classy super charged totally unregulated version of Cyprus, but whilst this economic model might delight wealthy Greeks, it will come with a level of inequality that will horrify the average European.

If a referendum is exactly what the doctor has been suggesting for years now, why have European politicians been studiously avoiding it? Because these politicians are blind to the big philosophical sun shining overhead radiating issues such as "justice" & "legitimacy", they are instead completely engrossed by the short term shadows flickering on the cave wall, they are like a drunk in need of a drink, heading toward pleasure in the now rather than thinking about the long term consequences of excessive drinking.

What are the short term shadows the unjust illegitimate intoxicated politicians running Europe focus on? Back in 2009 the EU had a chance to get tough on failing states such as Greece, but instead they have been buying their bonds and propping up their banks and giving their governments money, so kicking a country out of Europe today will cost European taxpayers much more money that it would have done a few years ago. So Greece’s foreign public and private borrowing has exploded in the last few years, and outside the EU and in dire straights, the Greeks will write off all their banks and bonds and leave the rest of Europe with a vast financial hole. In addition to the damage a Greek default will do to Europe, it will have catastrophic consequences for the Greeks themselves. People like Merkel and Sarkozy are cowardly slavish narcissists, like the liberal elite in the 1930s they can't bring themselves to face reality and instead let the disease fester and fester. They are incapable of doing the right thing, seeing the light, confronting their demons, admitting failure, reforming, embracing self knowledge etc. As long as Europe is run by these people hundreds of millions of people are doomed to disaster.

The only thing that really depresses and amazes me in all of this tragedy is the Chinese. The Chinese government is incredibly professional and incredibly in touch with its people. Although China is a technocracy, the Chinese government has one of the highest approval ratings in the world, they are masters of reading their people and creating that critical harmony between society and government that all successful countries need. They must be able to see, just as I can see, the appalling mistakes these European politicians are making and the disastrous dead end they are pursuing. I do not understand why Hu Jintao hasn’t given a press conference saying "Trust me my poor European masses, democracy has failed, you are being run by zombies, what you need to get these zombies to do to save your lives is xyz"? Why on earth, for that matter, hasn't Hu Jintao emailed me to say "You poor sod, you are only guy in the West who gets it, come and live in China and teach Ancient Greek philosophy on a mountain in Tibet". Sometimes I think I am living in a dream and it's all a great big joke. But what I don't understand is why are they subjecting me to this joke? Why did they put me on this planet? Am I supposed to laugh or hide or try to change it?