Greek Bailout: It's Going to Fail

Germany has approved of the latest Greek bailout terms, which would mean that Greece would be handed over £ 60 billion (86 billion euros). This means that Greece would be able to pay two of the creditors: the IMF and the ECB.

Should we celebrate? Certainly not. Should we heave a sigh of relief? I don’t think so.

The firebrand Greek Prime-minister, the forty year old Alexis Tsipras, the leader of Greece’s Left Wing party, Syriza, after holding a defiant referendum a couple of weeks ago, in which the Greek public overwhelmingly and decisively rejected the original terms and conditions of the bail out, described to them as humiliating (by Tsipras himself), essentially, capitulated and, after his victory in the referendum—if it can be called that—accepted terms and conditions that were, in many ways, more stringent and humiliating than the original ones. Tsipras came to power in Greece earlier in the year on the wave of anti-austerity feelings in Greece, which has seen her economy shrunk by 25% since the financial crisis. He tried to justify his capitulation by declaring, during the debate in the Greek parliament—which he won comfortably enough despite a significant rebellion by MPs of his own party, including the speaker, one  Zoe Constantopolou, who looked every bit as fearsome as the fearsome speech she delivered, in which she declared the day as the black day for democracy in Europe—by mouthing sentiments such as “It is better to fight an unfair battle than handing in weapons”, and that he had to make a choice between economic hardship and chaotic default.

Quite what weapons Greece currently has which Tsipras is loath to hand over to the enemy (Germany) is difficult to see. Also, he must have known the stark choices he faced even before the referendum. What purpose did the referendum serve, then? As has become clear, it did not serve any purpose. Tsipras was probably hoping (against hope) that a strong No vote by the Greek public would give him negotiating muscles in the bailout talks. That did not happen. The Germans are renowned for many things, but intellectual flexibility is probably not one of them. When Tsipras returned to Brussels, he was told—as he must have feared he would be, notwithstanding his public posturing—that there would be no let up. If he did not want to accept the conditions laid down by the Germans he should close the door on his way out.

So what exactly is the deal? This is the third international bailout Greece has received since the travails of that country began five years ago. This time round Greece will receive a total of 86 billion euros. What are the conditions? The conditions are very harsh, some might say punitive, notwithstanding the extension offered to the maturity of the debt by the debt by the EU. VAT discount will be abolished on the islands (which depend on the tourism for subsistence). There will be more VAT changes. Corporation tax will be increased, as would be the tax on ‘luxury items’. The pensions for the elderly (who have already seen a drop of more than 30%) will dwindle further. (And—shock! Horror!—the public sector workers cannot retire early and will have to work till 67, like they do in Germany.)

There should, however, be no doubt as to who is going to suffer the most by the latest wave of austerity measures launched by Germany: the poor. Public services will be severely affected.

Five years into the crisis there seems no end to the miseries of the ordinary Greeks.

As the IMF has (finally) said, the sheer enormity of Greek debt is such that it has now reached unsustainable levels. The IMF also said that the forecasts for the growth rate of Greece were unrealistic.

I read a few articles in newspapers that described how Greece, for all practical purposes, will become a protectorate of Germany, with little to no economic freedom, little control over its fiscal policies, and having to sell its public assets to pay her creditors. That is obviously a hyperbole, but at the core of every hyperbole is a kernel of truth.

It also raises the wholly legitimate question whether the latest austerity measures are going to do any good. They most probably won’t; they would make things considerably worse. There is every possibility that the continued austerity will only bring further depression, and the inevitable rise of the right-wing xenophobic element.

The Germans would do well to look into the past of their country, in particular what happened between the two World Wars, and the consequences of the victors imposing draconian measures on Germany after that country’s defeat in the First World War. In contrast, the treatment of Germany (OK, West Germany, as it was then), initiated by the Americans under the Marshall Plan, was very different, and yielded a very different outcome.

The terrible (and unnecessary) pain imposed on the Greek people is very difficult to understand (or even justify) in purely economic terms. They will not help the ordinary Greeks or the Greek economy, and, if the Germans think that they are going to get the money back any time soon—if at all—they are deluding themselves. It is highly likely that the Greek economy is not going to be robust enough for decades, at least, to pay the interests on the debts/loan, leave alone the loan. Greece has become an economic basket case. The Germans might as well flush the money down the toilet. (I suspect the austerity measures imposed on the Greeks serve no purpose other than quelling the Revanchist fury in ordinary Germans who are furious at the Greeks for what they (the Germans) no doubt see as their refusal to fess up. The Greeks are stereotyped as lazy, corrupt, dishonest people who don’t pay taxes, don’t want to work hard, don’t want to make any changes to their bloated and unsustainable public sector (as no doubt the Germans view it), and want to live in a Socialist utopia which is bankrolled by someone else (Germany). Does anyone notice similarities, here, with Scotland?)). Even if you subscribe to this stereotype, it beggars belief to assume that the Germans (that is the German politicians) were unaware of this when they allowed Greece to join the single currency in 2001, or whenever it was. The truth is Germany allowed Greece to join single currency, as if they were buying a cheap company (who would buy German goods). Or maybe, the German politicians fear that if they gave Greece an easy ride, other countries like Spain and Italy would demand similar treatment.

It is difficult to see how the unhappy union can last. It cannot last. And when it will eventually melt down—it’s only a matter of time—most people would think that it was a flawed concept to begin with. It was ludicrous to expect that different countries with very distinct national identities and vastly different economies would be able to work together under a single currency.

 

Book of the Month: An Object of Beauty (Steve Martin)

Steve Martin is a seriously good comic actor, one of my favourites. Like Michael Cain, he has regrettably not been very choosy in the movies he selects, and has some ghastly films to his credit; however, when he is on fire, as in Dirty Rotten Scoundrels (which also stars Michael Caine) or Planes, trains and Automobiles (with the late John Candy), he is superb. When he is on song, there is a kind of manic energy in Martin’s performance which the audience gets sucked into.

In the last decade, Martin, described as ‘indecently multi-talented’ by The Sunday Times, has diverted some of that energy into writing novels, one of which (Shopgirl) was made into a film, I think.

With An Object of Beauty, his third novel, Martin turns his attention to the art world of painting.

An Object of Beauty creates for the reader the world of New York art scene where creativity and talent collide with cold commercial calculations; giant-sized egos of the artists are dwarfed by the elephantine egos of the art collectors; and where, once you have crossed a certain threshold, if you do not find a knife hanging between your shoulder blades, it is only because the price of selling you down the river was not high enough.

In An Object of Beauty, Martin, who is apparently well-known for his art collection, creates the world of fine art high jinks very vividly and entertainingly for the reader. Several works of arts and painters of greater and lesser reputations play important cameo roles in the narrative. Martin obviously knows what he is talking (rather writing) about. When you possess the technical knowledge of the subject, the temptation to dazzle the reader by showing off must be extreme. To his credit Martin is in total control and at no stage does the reader is made to feel inadequate. Thus, if you (like me) know next to nothing about the relatively lesser known twentieth century American painters like Milton Avery or Maxwell Parish, or the 19^th century Russian painter of minor reputation (according to the novel) Ivan Aivazovsky, it does not matter. It does not matter because these works of art are not inserted in the novel as mere add-ons; they are weaved skilfully into the narrative and, in many instances help to propel the plot forward. It is not an easy skill.

Martin is at his satirical best while describing the art-parties and pretentions of the nouveau riches who go around hoovering up paintings so that they can have their personal art galleries, to which they invite gallerists and art-critics and bore them to tears with tiresome anecdotes, which are repeated at every party (and to which the assembled react every time as though they are hearing them for the first time).

If An Object of Beauty was only about endless (albeit witty and entertaining) descriptions of gallery openings, auctions of paintings, and the artistic differences between galleries on the East and West sides of New York, readers, barring those possessing an abiding sense of curiosity about the art world, would have lost interest. The novel would have been nothing but a collage of different elements which would have failed to cohere into a whole. That is not the case here. An Object of Beauty is a plot driven novel. Martin may take the reader on a tour of ‘classical’, ‘modern’ and ‘contemporary’ paintings, but he also has a story to tell; and he tells it with great pizzazz.

An Object of Beauty is the story of Lacey Yeager, who enters the world of New York art scene in the 1990s as a lowly paid minion at the Sotheby’s. Lacey is intelligent, focused, sufficiently ruthless, sexy, and not above using her oomph to get what she wants and reach where she wants to go. Where Lacey ends up, at the end of the novel, and almost twenty years after she first joined Sotheby’s, is where she started, having lost a fortune (and with it, fair-weather friends and acquaintances) during the stock market crash and global recession. However, in the intervening years, she has a hell of a roller-coaster ride, and the reader is with her at every twist and turn. Lacey’s story is told by a friend, Daniel Frank, an art-critic and a friend of Lacey from her college days, and who makes periodic appearances in Lacey’s story. He also plays an important, if peripheral, role—something that will cost him a relationship several years later—in Lacey’s rise in the art world.

If the above description has led you to believe that Martin has some sort of morality tale to tell, you would be wrong. Just as he stops himself from showing off his knowledge of the art world, Martin refrains from taking a moralistic stand on Lacey’s devilish behaviour. The novel is remarkable for its moral-neutrality. Indeed, despite her schemes and deceits, Lacey does not come across as a villainess. When she loses her business and fortune, just as she is nearing forty, you feel a twinge of sorrow for her and have no hesitation in agreeing with Daniel Frank who cannot think of a ‘personality less suited for being marginalised’. The flip side is Lacey does not really come alive for the reader; she remains, despite her plotting and witty repartees and a cunning ability to use sex as a tool to get what she wants, somewhat two-dimensional, a vehicle for Martin to deliver a satirical novel on the art-world and nothing more. An Object of Beauty is a novel dominated by its milieu in which the main characters are lost.

The prose of An Object of Beauty is a mixed bag. Martin keeps a steady supply of witty one-liners, frequently, to great effect. But the tone of the narrative is not even. At times the narration is sardonic, reminiscent of vintage McInerney (Bright Lights Big City, Story of My Life) and Bret Easton Ellis (Rules of Attraction), with its blistering insights and acerbic asides (when a millionaire French art collector, who is ten years older than Lacey,  becomes interested in her and clearly wants to marry her, Lacey, while she uses his connections to further her career, has no intention of settling down with him; one of the reasons why she wouldn’t settle with him is he is older than her, which means, she tells Daniel, that he would be 45 when she is 35, and would be 55 when she is 33, and, in due course would be 65 while she still was 33); but the tone is not sustained and, at times, becomes a tad pedagogic.

The multi-million dollar industry behind the paintings is a world beyond the reach (or imagination) of many. In An Object of Beauty, Steve Martin, with cheerful élan takes the reader on a lively tour of this world and, in the process, also delivers a well-plotted novel. Well worth a read.