Surprise surprise, a deal was finally struck to "save" Greece from default. Was it ever in doubt? It all depends on how cynical one is about the EU, the European political elites and the lengths to which they are prepared to push a country and its people, to save face. Will it last? That depends on whether one is prepared to listen to the latest utterings of the EU leaders, who claim the situation has been stabilised or, to the more realistic political and economic analysts, who have been warning for several years that the eurozone cannot survive. I tend to follow the latter..
What does the deal involve? Greece has been advanced another 130 billion euros or £108billion, which allows the country to redeem its debt in March, thereby preventing a default which would have pushed the country out of the euro. An estimated £107 billion has been lost, most of it carried by the private sector. The Greek people will be required to endure austerity measures which will be prolonged for the next eight years until 2020, at which time the ratio of debt to GDP, will have been reduced from the current 160% to 129% (the target was 120%). For a country which is notorious for tax evasion, where government figures have been fiddled every years since the country joined the EU and where the population retires earlier than almost any other country in the EU, is any of that even remotely realistic? The riots in the streets of Athens have lost much of their earlier intensity and it would appear there is now an atmosphere of resignation among the Greek people. The latest opinion polls show 73% of Greeks want to remain inside the euro but 49% do not believe the country will survive as a member for the next two years. This contradicts earlier polls which showed that the majority wanted to revert to the old drachma.
This is perhaps an indication that some of the anger has dissipated but it may also just be a temporary lull before more serious demonstrations are resumed. The economics of the problem have not changed; the Greek economy is no more likely to be convergent in eight years than it is now and the austerity measures will inevitably undermine the capacity for economic growth which is vital, if the required changes to the economy are ever to happen. That is what remaining in the eurozone will mean for the Greek people and when those who currently express the opinion they would want to remain as members, finally realise what membership means, inevitably there is going to be renewed anger. The important point however, is that this is only half of the equation; the rest of it involves the German people and other member states which will be required to carry the burden of the Greek bailout. Is Greek membership of the eurozone as important to them? The answer to that question in the past has been, not if it means the German taxpayer has to carry an increased share of the costs. The people of the northern European states also take a more realistic view of the potential of another Greek bailout in the not too distant future, something which they see as a "probability" rather than a "possibility".
On Sunday past, Scotland on Sunday carried a leader column which should have been written several years ago. It was peppered with "wise after the event" comments and quotes the previous Chancellor Alistair Darling who desctibes European leaders' policy towards Greece as "sheer lunacy" and who argues that Greece should be allowed an orderly default. SOS states, "the whole house of cards is collapsing", "the truth is, the Grrek economy was always incompatible with Eurozone membership", "Greece bluffed its way in by fiddling its accounts", "encouraged to do so by a complicit EU eager to expand the Eurozone empire", "It is the same integrationist obsession...", "That kind of tunnel vision can no longer be indulged" and so on, and so on. When did Alistair Darling and Scotland on Sunday waken up to the situation? Where were they and all the other "wise after the event" experts, who are now exiting the woodwork, when some of us were warning of the likely outcome of the "deals" and "blind eyes" that were turned when the Eurozone was born? The Greeks were not the only ones who fiddled their figures, nor are they the only ones who continue to fiddle their figures, year in and year out. It was all accepted, in the interests of the "European project".
Now that it has become politically acceptable to express doubts about the wisdom of pursuing the "European project" to the detriment of almost everything else, how will that effect the debate on independence? The SNP's entire European strategy is in tatters, the comfort blanket that the EU was supposed to provide for a nervous and unsure Scottish people, is looking gey threadbare. For the SNP to continue to pursue the EU strategy of joining everything and accepting everything, just so long as it emenated from the EU, is dead in the water. The danger for the National Movement now, is that the Scottish people, having been forced to accept that all things European are not what they seemed or, more importantly, are not what they were told they were, seek their comfort blanket elsewhere and that "elsewhere" is the UK. It is not enough for John Swinney to say that the SNP do not see the economic conditions being right for Scottish membership of the euro within the next decade. To suggest that it is ever likely to be "in Scotland's interest" to join the euro, means one of two things; either the SNP do not understand the likely implications of joining a euro of the future or, it is no longer pursuing independence.
If Greece remains in the euro, there are strong moves to install EU commissioners to monitor every move made by the Greek government. Greek budgets will be determined only by agreement with the EU and, having had their government imposed, the Greeks will no longer be in charge of their own taxation. This may mean that the profligacy ends but it is also the end of independence. The Greek problem has simply brought to a head, the final realisation there cannot be 17 taxation policies and only one monetary policy. I have already pointed this out earlier on this blog but the latest deal to "save" Greece underlines it more forcibly.
The SNP is now going to have to drop all pretence that Scottish membership of the euro will be acceptable "if the economic conditions are right" and, either admit the conditions will never be right or, admit the party is prepared to accept Scottish taxation being determined by the European Central Bank as the price of membership of the euro of the future. If that is to be the "end game" for the SNP, it means the party is no longer pursuing independence because no matter how it is dressed up, if a country has both its monetary and fiscal policies determined by some body furth of its own borders, it is not independent.
For the SNP to accept that as the likely scenario for the eurozone - and there is no doubt it cannot go on as it has done for the past decade - the party is going to have to start thinking ahead a little bit. It has operated on the basis of the "next press conference" and, if it ever did give the EU situation any serious thought, it was obviously wrong in its analysis of the likely consequences of the euro and the centralising nature of the political treaties. It means it has to stop offering the EU as an alternative to the UK and really start to offer independence as the only real alternative