Daniel Hannan (MEP): Enough of This Greek Farce – Everyone Knows Default is Coming!

[youtube=http://www.youtube.com/watch?v=B9HHzvOBpy8]

• Greece will default. It is inevitable! What is happening now is not a bailout. It is the final financial rape of the country!
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  Enough of this Greek farce: everyone knows default is coming!!
  by Daniel Hannan, http://www.telegraph.co.uk/
  Daniel Hannan is a writer and journalist, and has been Conservative MEP for South East England since 1999. He speaks French and Spanish and loves Europe, but believes that the European Union is making its constituent nations poorer, less democratic and less free.
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  The “Greek tragedy” metaphor has proved irresistible to columnists, but what is taking place in Athens owes less to Sophocles than to Ionesco. No one seriously thinks that the measures adopted by the Greek parliament will end the crisis. In Brussels and in Athens, officials are conniving at an official suspension of disbelief.
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  In their imaginary world, Greece has now turned the corner. Tax evasion will stop. Public expenditure will fall. Privatization will bring in an extraordinary €50 billion. The county’s creditors will be satisfied, and Greece will return to growth.
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  In the real world, none of these things will happen – certainly not while Greece remains caged by the euro. Never mind the credibility of the fiscal reforms. Look at what ought to be the easy bit: the sale of state assets. Greece is proposing to denationalize a water company, a gas supplier, a rail operator, an airport, a casino, a nickel mine and much else. Good. The fact that all these concerns are owned by the state goes some way to explain why the Hellenic Republic is in its present mess and, in the long term, their transfer to the private sector will indeed boost growth.
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  But the notion that their sale will raise anything like €50 billion is poppycock. I mean, who would want to pile into Greece at the moment? (Among the assets being floated are, er, shares in a number of banks.) With prices down, and other European governments also running fire sales, the likeliest buyers are vulture funds. Nothing wrong with that, of course: in the economic as in the natural world, vultures play a vital role, correcting market distortions and forcing a rationalization of capital. Still, the idea that Greece can raise five times as much in privatization by 2015 as it has raised since 2000 is preposterous.
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  Here’s the point, though. The EU and IMF bureaucrats overseeing the programme know that it’s preposterous, just as they know that the tax and spend forecasts are preposterous – and just as they know, deep down, that Greece can’t grow in the absence of a devaluation. The whole process is a farce, aimed at stringing out the crisis until the financial institutions exposed in Greece have shuffled off their liabilities on to the taxpayer. The moment governments and international institutions have taken over the banks’ debts, Athens will default. Everyone knows it. Why insult us with this choreography?

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