By Marchel Michelson, Forbes
Greece decided to implement capital controls from Monday to freeze its financial situation until at least a July 5 referendum. But again Greece blamed the ECB and other international organizations for its predicament, refusing to acknowledge any fault for its own troubles.
Prime Minister Alexis Tsipras seems to be acting like a troubled person, standing on the ledge of a high-rise building, threatening to jump and expecting bystanders to have pity and make promises to get him back from the brink.
If that was his plan, he has failed and will go down in history as the man who sank Greece into a financial abyss, meanwhile claiming that nobody loved him or his country.
There were difficult talks, there could have been a deal, there might still be a deal before the July 5 referendum, but Tsipras has effectively resigned as Prime Minister by declining to decide. As a modern King Canute he tried to fight the rising seas and failed to turn the tide.
The decision to impose capital controls, and other decision to freeze capital flights until at least the referendum, was unavoidable. Without it there would have been a bank run and a complete erosion of whatever trust there was left in the Greek financial institutions.
Tsipras blames the ECB, which has been throwing billions of euros to shore up the Greek banks – money from the savings and pensions of Europeans – but he refuses to budge his own standpoint. He wants the rest of Europe to pay for Greece’s past errors – without even a sorry note or a promise of better behavior – just like Britain’s David Cameron wants to dictate the rules in Europe as a condition for remaining a reluctant member.
The European Union and the euro zone are based on a principle of solidarity but also on a premise of good house keeping.
Greece was not ready to join the euro when it did. Greek politicians and officials have lied, doctored statistics and made untenable promises. Now the Greek PM not only does not offer any apology for that but also wants all Europeans – rich or poor – to suffer so that Greek civil servants can keep their relatively advantageous pension packages. That will not work.
Greece is asking a lot and offering nothing, screaming loudly about its treatment.
The European Union, European Central Bank and IMF may perhaps be too strict in their attitude and there is ground for a debate about their role.
But the Greek histrionics made serious discussions impossible. Tsipras and Siryza are storming a hill against blanket fire. They will not gain any ground but die as heroes.
Greece had a bag of arguments, a lot of political credit and a supportive public opinion (Even I had a soft spot for their predicament). Tsipras and his team blew it all.
The chances of the Greek people accepting the creditors proposals at the July 5 referendum are tiny. At most, the Greek will accept it because they cannot get their money out of the banks or buy any imported goods.
Any acceptance by referendum will be seen and felt by many Greek as a concession under duress – as an ultimatum at the barrel of a gun. It will not be worth the paper it is written on.
But in the end it is the fault of their own politicians, from Pasok to Syriza, their own oligarchy, their own system.
Tsipras tried to save the honor of the Greek people, he is gambling with very high stakes and he risks losing the credit built up by generations of hard-working Greek people. He refuses to acknowledge that there is any blame on Greece, and seems to claim that all the country’s problems are due to the foreign creditors.
Greece will have a very difficult week up to the referendum. There are likely to be skirmishes in the streets, Greece may have to leave the Euro zone and drop on the rubbish heap of countries with junk debts, high interest rates and without a shred of international trust in its policies.
Greece may even succeed in undermining the entire European Union and euro zone project. Perhaps some people in Britain and the National Front in France may applaud, but for a large majority of people in Europe there will be a high level of resentment towards Greece.
There are people in Greece that get European food support, because of their relative poverty. Tsipras is risking even loosing that European solidarity and some people in Greece’s outmost and poorest regions could starve from hunger. Greek people could swell the long lines of refugees aiming to settle in the richer countries of Europe.
Nobody can blame Tsipras or Syriza for the mess Greece is in, but they risk going down into history as turning the country’s problems into a historic disaster.
I hope the Greek people are wiser than its chosen representatives.
