It is a patent nonsense to suggest that Greek debt is their fault alone
The banking system has a crisis that had nothing to do with the Greek state, even if it led to the revelation of how dysfunctional the running of the state was and is.
But the cost of that wider banking crisis and the consequences of a dysfunctional Greece are both being borne by the Greek state, when only the cost of fixing the dysfunctional state governance should be borne by them.
It’s a bit rich for Irish people to judge Greek people.
We delude ourselves that we rooted out the cause of our problems in 2011 when all we did was replace the people and left the same system in place. The seed of the next tribunal can be found in NAMA, where Fine Gael will have star billing.
It is factually incorrect that the current Greek national debt of €330 billion is all because of the dysfunctional way Greece was run for decades. And the EU, and in particular the European People’s Party (EPP) of Mr Juncker, Ms Merkel and Mr Kenny,was more than happy to look the other way over the years.
It is estimated that 15% of this debt, let’s say 20%, or €66 billion is from the cost of running the dysfunctional country and let’s round that up to €100 billion for the sake of punishment. That still leaves €230 billion debt that has absolutely nothing at all to do with the Greek state or the Greek people.
Even if Greece becomes the new Germany, it can never repay that money as it can never generate sufficient excess income.
That €230 billion is directly related to the bizarre and mind boggling stupid decision made by the EU, in March 2010, that instead of the ECB funding the eurozone banking system through Eurobonds, in the same way the US dollar and UK sterling are funded, someone at EU level decided that a condition would be made that in order for the ECB to keep funding local banks in Greece, that funding had to be added to the Greek national debt.
Can anyone imagine the Federal Reserve forcing the US government to take on the balance sheet of the banks in California, which is technically bankrupt?
All those who want it to look like Greece is accepting harsher terms that it rejected last week miss the wider picture. Everyone knows Greece needs massive reform and that this will take years and will be painful.
But last week no one was talking about reducing Greece’s debt, this new agreement specifically acknowledges that Greece’s debt is unsustainable and needs to be reduced. It doesn’t matter how that is done.
The fact it will be done is what’s important and more than our Irish heroes ever managed.
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