This is an exclusive preview – in English! – of my column which will be published in the Belgian weekly Le Vif/L’Express this coming Thursday
The phenomenon is the way in which things manifest themselves to us, and this can be real – either with things appearing as they really are; or it can be deceptive – with things appearing other than they really are – such is the case for optical illusions for example which suggest a false reality. Where the Greek language said phainomenon, latin said apparentia, appearance, with the same two nuances as for phenomenon – either an appearance faithful to the nature of things, or, on the other hand, an appearance which is deceptive.
Why this talk about epistemology? Because of the Greek elections last Sunday, and the European political class which has fallen victim to an appearance which is deceptive: it thought that encouraging the Greeks to vote for the right-wing party New Democracy was a way of saving the Euro, fearing that a vote for the left-wing coalition Syriza, would signal the end of it. Whereas in fact the opposite is true
Why? Because the formula adopted so far to try to save the Eurozone has been a spectacular failure. To persist stubbornly with the same policy following the principle of ‘TINA’ (There is no alternative, the infamous words of Margaret Thatcher), is to be sure of pursuing the hellish spiral descent which was triggered at the end of 2009. The Europeans who are roped together like a climbing team (let’s not pull the wool over our eyes) are in spiritual turmoil. The ropes of its members are working loose one by one: Greece, Ireland, Portugal, Cyprus…. whilst the number of them looking to have a secure foothold – burdened by the weight of those already dangling in mid-air which is growing heavier and heavier – is reducing dangerously.
The capital markets made no mistake on Monday 18th, the day after the Greek elections, the rate for Spanish 10 year bonds, which opened at 6.82%, went rapidly through the roof, reaching 7.25% at 3.00 PM. To appreciate the significance of these figures, it needs to be borne in mind that the European Financial Stability Pact, still called the “balanced budget rule”, which compares a country’s expenditure, not to its receipts but to its Gross Domestic Product, requires according to its own logic that growth should be higher than the ‘average’ rate set for its debts by the capital markets. When the markets are asking for 7.25% to lend to a country, its economic growth would need, therefore, in order that that the debt does not increase yet further, to be of the same order of magnitude. We are still very, very wide off the mark with a predicted growth for Spain of -1.5% in 2012.
The vote in Greece in favour of the memorandum drafted up by the Troïka (the European Union, the European Central Bank, the International Monetary Fund), so coveted by the European political class, has not has the desired beneficial effect on Spain. Would it be any different for Italy, which is also in a fragile condition? It is difficult to see how.
What would have happened if the Greeks had propelled Syriza into first place on Sunday 17th June? Let’s not delude ourselves: the markets would not have been happy with this either (which highlights the fact that resolving the problem is by no means simple). But at least a shot across the bows would have fired, the gangrene which is eating inexorably away at the Eurozone would have been halted. A period of reflection would have been needed. For as Alexis Tsipras, the head of this party, had announced it was not about Greece quitting the Eurozone, but rather about reflecting on how things could be done differently. The dramatic events which have been piling up since the beginning of the crisis in the last few months of 2009 highlight the urgent need to develop “another option”. And when we say “another option” we are not talking, of course, about cobbling together in a few weeks the Europe which they have failed to put together over the course of the last sixty years
All the more so since the members of the rope-party who are already suspended in mid-air and who are already benefitting from the harsh compassion of the Troïka, would have rapidly added their voices to that of Spain, demanding another approach for them as well. Mariano Rajoy, the Spanish Prime Minister, had himself already learnt the lesson of the “Syriza effect”, since he demanded, and obtained on the 10th June, a 100 billion Euros aid package drawn from the European Solidarity Funds, which prevented his bank Bankia from sinking like a stone, all this without any conditions being attached to the loan.
A new watch word is needed for the days to come: “There is ALWAYS an alternative”.
‘TINA’ has been refuted by the facts, and it is about time we accept it, because from now on every second counts!