Understandable attitudes. It is justified, understandable and even wise that Jean-Claude Junker, the president of the Eurogroup, is continuing vigourously to reject the hypothesis that Greece could leave the eurozone and that he is using heated, even disagreeable, terms towards those who do not share his view. This is his duty for a number of reasons, amongst them the fact that the Greek exit would not be possible until early July and that it would in any case have to be painstakingly prepared. In view of what has come to light about analyses being carried out to deal with this eventuality (see below), I am of the opinion that the most reasonable attitude belongs to Dr Merkel (who held a bilateral meeting with Barack Obama last Saturday, after the meeting of the G8): “We need to stop saying that Greece could leave the euro, stop talking about it, not turn up the background noise, not mix up the ideas of the Greek voters, the German taxpayers, Italian savers. The best thing is silence.”
The reasoning of a journalist. You might well ask, then, why I myself am not following Dr Merkel's sage advice. I have two answers to that: (a) my opinion has no bearing on events, whereas anything that the German chancellor or the president of the Eurogroup say has an immediate reverberation and an immediate influence; (b) my job is to find out what's going on and express an opinion.
As for the arguments which lead me to predict the Greek exit from the eurozone, I have a whole catalogue of them. Here are just some:
1. A popular verdict. You can't accept the results of an election when they shore up your own beliefs and reject them when they don't. Let us respect democracy, the Greeks have clearly rejected the commitments their government had made with the EU and the IMF; we need to bow to this popular verdict. The European Commission and most of the countries of the eurozone have resoundingly confirmed this. The possibility of a few adjustments is sometimes mentioned, mainly regarding the financial timetable; but the requirement in terms of Greek efforts has been reaffirmed.
2. Back to the ballot boxes. The impossibility of forming an alternative government in Athens will require the Greeks to return to the ballot boxes on 17 June. However, the experts indicate that the results won't change much. But all European sources and the IMF have reiterated the vital need for Greece to observe its commitments. Wolfgang Schäuble, the German finance minister, said: “anyone who says that it is not possible to comply with the recovery efforts is lying to the Greek people”. The European authorities and those of the principal member states must therefore now get ready for change and that is what they are doing (see the next point). And, of course, the world of speculative finance is circling and taking advantage.
3. The German reflection. After a few vain attempts to hide the existence of analyses on the best way to deal with any bankruptcy on the part of Greece, the German authorities have admitted that studies to this end are indeed being carried out. Schäuble said that the German executive would be a “funny kind of government” if it did not bother to prepare for emergency situations (whilst stressing that the working group tasked with the job is separate from his ministry).
The initial results of the reflection is underway (still according to the minister): (a) Greece should not leave the EU, whatever certain lawyers may think, and Community support to its economy would be developed; (b) its exit should be staged after 1 July, once the European rescue funds are fully available; (c) Greece's subsequent return to the eurozone would not be ruled out. Other considerations concern the financial technicalities involved: the handling of Greek debt instruments owned by the ECB in euro, details for bringing back the drachma, etc.
4. The real victims. The biggest losers from Greece's behaviour are the other countries of the eurozone and their populations, because every little hiccup in Greece will have a repercussion on the financial situation of the other countries in budgetary difficulties and speculation is running riot. It is incomprehensible, even irresponsible, for political figures and commentators to adopt stances which call for ongoing indulgence towards Greece's behaviour, when the victims of its default are the populations of other member states and the main beneficiaries are financial speculators.
5. Dizzying figures. The cost of the Greek default has not been officially stated anywhere, but the figures doing the rounds are certainly impressive, even if we assume that they are to some extent exaggerated. The latest edition of the French weekly “Le Nouvel Observateur” states that “each and every European has already lent Greece the equivalent of €600” (translation). Other sources report different calculations and the results are just as heady - for example by calculating not the cost to the others, but what each Greek citizen would have received if the support to that country had been paid to the Greeks directly, instead of being mostly mopped up by international speculation.
The world of information also has its responsibilities, echoing almost automatically what the world of finance wishes to suggest. I quote this comment from Jean Quatremer's latest book (translation): “It is in the interests of certain players on the financial markets to increase panic and therefore for the press to validate an alarmist version of the facts, in order to validate their bets and allow them to make substantial profits.”
6. And Greece's efforts? It does not look like the country affected has made effective efforts to improve the situation and make good its commitments. We are now seeing a number of interesting initiatives, aiming at boosting tourism, simplifying administration, agricultural production. But the investigations carried out by journalists sent to the country, and most of all the analyses of the battalion of civil servants sent by the European Commission, the International Monetary Fund and the European Central Bank have, at the same time, noted: (a) the insufficiency and, in some cases, the total absence of the anticipated changes; (b) the impression that a section of the population has reached the limit of what they are able to bear. Some behaviour has gone beyond - in a negative way - the limits of what would have been reasonable, for instance as regards salary increases and the swelling of the civil service. At the same time, little progress in fighting tax evasion has been visible. There are specific problems on top of this, such as supplies of oil from Iran which may be cut off and which have not been paid for for a number of years.
EU support would continue and change in nature. The Community authorities and those of the member states involved agree unanimously that the eurozone will face up to its commitments if Greece does likewise. The declarations of Mr Barroso and Mr Van Rompuy (some of them individual, some of them joint), and those of the national authorities, are by and large unanimous: the link between the support of the eurozone as planned is subject to Greece complying with its commitments. This has been clearly reaffirmed. A number of observers believe that it could be relaxed here and there; but no overall renegotiation as called for by the main victor in the recent Greek elections, Alexis Tsipras, is on the cards.
To sum up: the EU's position is clear. In Germany, it has been stressed that the eurozone has been consolidated and that it is currently capable of dealing with anything that is thrown at it. There would be many complications if Greece did exit and it would take time to cope with these. But if it is inevitable, it will have to be dealt with. However, some heads of government still believe that this can be avoided: Mr Hollande and Mr Monti have clearly expressed this view.
Greece will, in any case, remain a country of the EU, with the support and advantages this brings with it.
(FR/transl.fl)