Sir, –I wonder if the people at senior troika level, who ask sacrifices of others, were themselves personally required to make comparative sacrifices, would the penny drop?
The first part of the Greek debt mountain relates to the debt incurred running the Greek state and providing the services it is reasonable for the citizens of a modern EU member state to expect. The fact is that, no matter how mismanaged the Greek state has been, or remains, the tax revenue generated by the Greek state in 2015, and the Irish state for that matter, is sufficient to cover the cost of running the state, even when you add back the debt costs for the debt incurred running the state since 2007.
The second and completely different component to the debt relates to how much the people of Greece were made, and they were made, to borrow to bailout the private sector banks because somewhere at some level in the ECB, it was decided that no euro zone bank would default, even though banks in the dollar, yen and sterling area were allowed to.
It was this vanity of unelected and unaccountable EU officials, taking decisions in secret, the way Jean-Claude Juncker admits he prefers decisions to be taken, that created this second part of the debt burden, which the new Greek government is trying to untangle from the first part.
But its problem is that for the troika to reach a deal on the second part of the debt would mean admitting that the pain of austerity inflicted on European people over the last eight years could have been avoided, if its political leaders had the guts to make the right decisions back in 2008/09. But doing that would have meant the banks facing the consequences of their poor lending decisions and the banks don’t make donations to politicians and political parties for no reason.
Everyone knows the stupidity of the politics and economics of not pooling euro zone debt into euro bonds. But to understand why the EU establishment can’t see what everyone else can, you need to understand human nature. The strongest human emotion is denial. Therefore a Greek debt deal would require the admittance of guilt and culpability; rather than admitting how wrong it was, the EU establishment will instead prefer to sacrifice the Greek people and possibly the entire European project. – Yours, etc,
DESMOND FitzGERALD,
Canary Wharf,
London.