13 May, 2012
Equally, one can say that Greece (and Italy), having been let in, should have been told that it had ten years to sort out the corruption, failure to collect taxes, the inflexible labour market and of course its borrowing levels.
But that is what should have happened. Events are now running their course.
As I have often mentioned, the European project is at its worst when it comes up against democracy: the two don't mix. No one, for example, would have come up with the daft system of the civil servants presenting laws to a tiny group of the uninterested if they hadn't been terrified that the populations simply couldn't be trusted to pass them. Now the Greeks have come up with an unsatisfactory election result (unsatisfactory, that is, to the bureaucrats). Their system is that in order of the number of votes cast, the parties can try to form a government, and the top three have failed to do so. Greece should proceed to another election.
However, the President, Karolos Papoulias, has summoned them all to last ditch talks today to try to form some sort of administration. Mr. Papoulias has the look of a man who has received a one-sided 'phone call from Angela Merkel. The latest word is that these talks have failed. Those opposed to the austerity programme pointed out that the majority of voters had opted against it, so they would be letting the people down if they conceded it (it's a bugger, this democracy business, isn't it?).
Two things can happen when there is a big, abnormal vote for one political wing or another, and it goes to a second vote: one is that people, worried about upheaval, vote for the traditional parties again. The second possibility is that people who voted the traditional way now perceive that there is an option, it is OK to vote for the extreme, and so the balance is forced further away from the norm. Opinion polls suggest the latter: the Far Left, who are opposed to austerity, will gain dramatically.
We suppose now that Greece must leave the euro, and that, once the markets know that this can happen, the spotlight will move to Spain, Portugal and Italy. For Mrs. Merkel not to allow Greece to leave, she would have to stump up a lot of German cash, and she comes up for election next year. To leave, Greece would have to default on its debts (which, to a small extent it has already done). I hope there is a plan B to allow this to happen as quietly as possible.
To Merkel, Schaeuble and the unmourned Sarkozy, we must say that their dithering and their blind reliance on dogma have earned them this result. Their unwillingness to change tack has been as damaging as the Greeks' unwillingness to modernise their political system.
As a footnote, let me say that you will hear on the BBC that there is a danger that the Far Right will gain influence: this is a party called Golden Dawn which makes funny salutes and hardly gets any votes. Ignore the BBC: the danger to Greece is the Far Left. Greece is in for a very difficult time whether it leaves the euro or not: what is needs is a party which can guide it on the road to financial rectitude, albeit at a pace it can stomach. And that is not the Far Left.