Reports back from Bond-style commando journos who have spied inside the command HQ cave, deep in a mountain inside the…er…Reichstag say that the first signals of Greece’s release from the chains of the euro have been seen. Is this a Good Thing? Or a Bad Thing? Hard to say for mortals whose only access to macroeconomic wisdom is the confusing array of articles in the media.
If you like the Mail, you won’t care if Greece stays or goes, but you’ll be worried about the “frightening £120billion (and that’s excluding the tens of billions we’ve pledged through the IMF)” made up by some sharp young suits at “the Eurosceptic Bruges Group” which will be demanded by the Eurozone to patch it all up. This is because “as this paper has argued for more than a decade, membership of the single currency is simply incompatible with democracy and the nation state”. So if you believe in democracy, those Greeks have gotta go.
If you’re a Sun reader, you’ll also be worried about that £120bn predicted by “experts”, but strangely, you’ll also be concerned about the FTSE 100’s dive, “knocking £28.5billion off the value of Britain’s biggest companies”. Like all Sun readers, you’ll be hooked on the progress of the FTSE due to your long holdings in British blue-riband stock. The editorial also calms nerves everywhere by reporting fears of civil war in Greece. Never mind though, George Osborne displays the wisdom of Solomon, hitting back at nasty Socialist anti-austerity campaigners such as M. Hollande. You see, it’s “uncertainty not austerity” which has caused the growth crisis across Europe; “wobbling” was doing “real damage”. This terrifying death-wobble will “probably usher in left-wingers who would reject Greece’s £105billion bailout deal — leading to a return to the drachma”.
Similarly, the world must wait for The Telegraph to deliberate on whether Greece should stay or go, but the old grump administers a traditional tough-love smack to those naughty children of Southern Europe where “the public mood is growing hostile to the austere economic measures necessitated by their own profligacy and levels of indebtedness” [trans: “You’ve not only let yourself down but you’ve let the whole of Europe down, imperiling your Daddy’s nice little nest-egg”]. The Torygraph also manages to contort history like a magician’s modelling balloon by awarding the kudos for staying out of the euro to the Tories, who were…er…out of power at its inception when Gordon Brown insisted on staying out as a condition of remaining chancellor.
The Independent tries to live up to its name by comforting us with the simple statement that “the world braces itself for” the Greek exit. Hang on though, school clever-clogs Dominic Lawson has burst into the common room, telling everyone he knew the whole thing would end in disaster, because Daddy told him so. And it’s all those dreadful Germans’ fault anyway. And to support this view, he drags out a quote form that dear old balanced centrist, Milton Friedman, architect of Reaganomics and father of banking deregulation, as dictated to Daddy and Auntie Margaret.
Despite wall-to-wall coverage, it’s no clearer over at The Grauniad. The front page screamed that “Europe’s elite was braced for” Greece’s exit. The rest of us proles presumably look on, bemused like mediaeval comet gazers, watching the pretty, sparkly glow of doom as it approaches.
Uniquely, the paper actually bothers to look at the effect of the possible outcomes inside Greece – and for this it deserves a gold star. But it confuses us further by asking several experts for their opinions on “what if…Greece leaves the single currency?”. Well, you may not be surprised to learn that “the choices facing Greece are deeply unattractive…a Greek exit could be the trigger for a stronger and more stable euro, led by politicians and institutions with a clear interest in both its success and theirs.” On the other hand it could see the “collapse of the domestic banking system, the decimation of private savings and a crippling increase in the cost of imported goods and energy.” Further down the column, Costas Lapavitsas, professor of economics, SOAS, University of London, provides some welcome academic clarity; “Greece can no longer handle the discipline of European monetary union, and Portugal, Ireland and Spain are likely to follow.” Exit would remove the pressure of debt, “boosting competitiveness, lifting austerity and allowing for proper restructuring of economy and society…The first step for Greece should be to denounce the bailout agreements and default on its debt, opening the path for aggressive cancellation. Exit will follow in short order.” Au contraire, in the blue corner, Ray Barrell, professor of economics, Brunel University wags a stern finger at such caprice, telling us that “Greece would lose easy access to borrowing, and taxpayers would soon have to face the reality that they would have to pay for those pensions and support all the other structures that need reform.”
I hope that’s all clear then. In short, you pays your money – but probably not in euros – and you takes your choice. As you can see from my pathetically non-judgmental Sun cartoon above, I’m as confused as you.
Donations please to my think-tank, the International Forum for Macro-Economic Confusion. Thanks.