Has Greece reached the point of no return?

A point of no return is defined as the point beyond which there is no longer a possibility to return. Has Greece reached this point? I am afraid to say – yes, Greece probably has.

Processes have been set in motion on the political as well as the financial side which are unlikly to be reversed again. The government of Mr. Papademos may have been a stable and solid one, albeit without full democratic legitimacy, but once the course of new elections was chosen, there is now no alternative but to live with the consequences of this election (and of further elections). The likelihood of Greece’s having a stable government backed by a majority of the voters is slim.

Mr. Tsipras seems to have set off the spark for a new movement. He seems to be a skillful populist. He seems to be putting into words what many Greeks, particularly the ones suffering hard from austerity measures, feel strongly. The likelihood of that movement getting larger is greater than the possibility of it’s getting smaller.

On the financial side, a non-stoppable sequence is unfolding: no new disbursements before implementation of new measures; no implementation of new measures without a functioning government; no functioning government without the necessary majorities. That is a wonderful scenario for everyone to claim afterwards that “it wasn’t my fault”.

How does one feel about this when one has argued from the beginning that the Greek movie could end well if only everybody involved acted like leaders? Not good; not good at all! I note a curious evolution of my views.

I was not in Greece from March-August 2011. During this time, the basis for my opinions was my observation of the incompetence of EU-elites. I became literally a champion of the “Greek cause”: if Europe’s core only provided “real help” for Greece in the sense of steering private sector investments there (instead of sending money there to bail out banks), Greece would jump on that offer and immediately embark on prudent new policies. Instead of making the borrower weak one would have made him strong.

I returned to Greece in September and stayed until December 2011. I expected to find an attitude of determination to fix one’s problems with the help of others. Unfortunately, and to this date, I have not seen any proposal by any Greek of political, public, financial or academic life for an economic plan which would present a positive future perspective for Greece. The best economic minds of Greece seem to focus on what’s wrong with the Eurozone instead of coming up with proposals how to correct what’s wrong with Greece. At one point, a wrote an appeal to Greek brainpower.

I have now been back to Greece since early April. I witnessed an election campaign where I could not figure out what any party would do if elected. I witnessed how Greek parliamentarians tried to pull a fast one on their Prime Minister by attempting to pass over 90 amendments almost in undercover fashion. I witnessed how parties not only approved new financing for themselves but also disowned banks which had a senior collateral claim against the proceeds of such financing. Laws were approved with retroactive effectiveness and a collective action clause was triggered without necessity. Small private investors in Greece were more or less disowned while, at the same time, certain foreign speculators were paid in full for fear that they might cause trouble (which they would have).

All in all, to me the principal issue is no longer whether or not Greece stays in the Eurozone (even though I would still vehemently argue that Greece should stay). The principal issue is now how Greece can get through the enormous chaos which it will face in the next months, with or without the Euro. The country which invented democracy may find out what France discovered in 1959: in the face of a threat of total chaos, democracy is ill equipped to deal with the situation.

France had a Charles de Gaulle. Where is the Charles de Gaulle of Greece?

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