Published:

18 comments

Ashley Fox

Ashley Fox is an MEP for South West England, and is the leader of Britain’s Conservative MEPs.

The agenda for our last plenary voting session in Strasbourg was mercifully thin on business.

Thus far, the new Commission has stuck to its intention that it will only bring forward new legislation when it is really needed. I suppose we will believe that when we see it – ask me in a year or two’s time.

The crisis in Greece was the most important subject on the agenda but received less than three hours of parliamentary time.

We all know the Euro was put together badly. And so we should not be surprised when we see it coming apart. But I would still have wished for a little more attention from MEPs to the gravest risk to the prosperity of all of us.

The problem which has been gnawing at the innards of the single currency since its inception is that it was always a political dream, never an economic reality. It is a cherished symbol of the euro-zealots’ ambitions rather than a secure single currency. Unlike proper monetary unions – the pound or the dollar, for example – it never had sound foundations or even common rules that were observed by all.

The project can only ever work properly with a full fiscal union and transfers of money from richer to poorer states. Everyone knew that and some sensible people shouted it out loud 20 years ago. But the leaders of what would become the Eurozone did not want to say so. They invited people to ignore all those inconvenient practicalities, to leave all the awkward details for later, and to sign up to a common currency come what may.

To make things worse, those same leaders also looked the other way as Greece and others fiddled their key economic indicators to appear fit for membership of the new club.

The consequences of that orgy of wishful thinking are now being visited upon Greece in the harshest manner.

The terms of the country’s repeated bail-outs have meant misery for millions. And now the desperate Greek people have lashed out. At least they did it through the ballot box, as befits the inventors of democracy.

The election of the hard-Left Syriza government made the current crisis inevitable. It meant things could not simply go on as they were.

How this ultimately plays out we shall see. Certainly the latest time-buying fix is not the end of the story. But there are only two ways this story can end well – and one way it could end very badly.

One would be that Germany and others agree to send money south in fiscal transfers to Greece on a permanent basis. In return, the Greeks would agree to have their domestic politics set by Brussels and Berlin. This is most unlikely to occur and if I were a German politician I would not vote for it.

The second is for Greece to leave the Eurozone in an orderly way.

But the current stand-off between Athens and Berlin could still make a third outcome possible: the worst of eventualities – a disorderly exit by Greece.

Of course the choice to stay or go should lie with the Greek people, but I find it hard to conceive that they will ultimately have the reserves of patience needed to toe the single-currency line. Greece’s General Election vote made it clear that for many their patience had already snapped.

What concerns me most is how a decoupling should be handled. Do we get a careful dismantling of the Eurozone, or a sudden and frantic collapse?

If Greece’s departure from the Eurozone is becoming inevitable, it is in the UK’s interest for it to happen in an orderly manner.

We need an announcement of the departure after the markets have closed on a Friday. We need a bank holiday on the Monday. Maybe Tuesday too. And we need an immediate programme for the introduction of Greece’s new currency, be it called the Greek Euro or the drachma.

The new currency would start with parity to the Euro but a rapid descent is inevitable.

Remember, the nightmare outcome for the euro-fanatics will not be if this currency fails, but if it succeeds. Because that will give the lie to the myth that the single currency represents all things good. It will demonstrate to the whole of Europe what we in Britain already know – that there is a good life to be had outside the Euro.

I’d put the chances of success at 50-50. Make no mistake, life for Greece after a default would be tough.

Greece would automatically become more competitive, giving the economy a fighting chance.

However, the more you see of Syriza the more they look like loud-hailer Lefties straight from the Students’ Union. My worry is that after breaking free of the burden of all that debt and the strictures of the ECB and the Troika, they take that as their cue for a programme of undiluted Marxism. That will put the dead hand on enterprise and growth before it even gets going.

The irony is that in getting their democracy back, the Greeks may wreck their economy still further. But it will be their choice. And in a true democracy, you have to let people exercise their right to vote stupid.

18 comments for: Ashley Fox MEP: Why the best hope for Greece now is for an orderly Grexit

Leave a Reply

You must be logged in to post a comment.