What would Virgil have to say?
February 4, 2015
Just to be clear I am not talking about one of the main characters from the Gerry Anderson 1960s classic of puppet theatre, Thunderbirds. Rather we are thinking about the famous ancient Roman poet who wrote the Latin epic poem the Aeneid. Epic in subject matter and size, the Aeneid recounts the the mythological foundation of the Romans by the wandering Trojan, Aeneas. In the course of which it also recounts the Trojan wars – in which a large wooden horse features quite prominently. Now as we all know, the ‘gift’ of the horse by the Greeks to the Trojans was not quite what it seemed – and the rest, as they say, is history; or, rather, mythology.
But what is interesting for us as we survey what is happening on the European stage, and particularly as events unfold following the near outright victory of the anti-austerity party, Syriza, in the recent Greek elections is the poem’s warning that the Trojans should “Beware Greeks bearing gifts”. Actually, the more proper translation is “I fear the Greeks, even those bearing gifts”.
And whilst ‘fear’ perhaps doesn’t accurately describe the face of Pier Carlo Padoan (Italian Finance Minister) at his meeting with his Greek counterpart today (3rd February), Yanis Varoufakis, it is interesting to speculate what the German Finance Minister, Herr Schauble’s face would have looked like if he had been a fly on the wall at the Greek- Italian talks. It is also worth noting the somewhat more reserved visage of Mr Padoan in comparison with the warm smile of Mr Varoufakis. Although the former did say publicly that “Attention to growth is paramount to guarantee the sustainability of Greece’s debt.”.
It seems that the ‘gift’ which the Greeks had proposed to the ECB – that the Greek debt be swapped for ‘perpetual bonds’ as opposed to outright default or unilateral write downs of the Greek debt – has not (yet) been accepted. Although note that the stock markets in both Greece and elsewhere seem to be pricing in some kind of accommodation. The Greek stock market closed over 11% up on its start today. Do ‘they’ (whoever ‘they’ are…) know something?
To many what is starting to play out in Greece is threatening to become a tragedy ( or perhaps a farce) – but others (and I would count myself amongst them) are not so sure about this. We have seen very significant change in the noises coming out of the EU and the ECB in particular over recent days and weeks. Noises on things such as QE which would have seemed unthinkable just a couple of months ago. We should be mindful of this when we reflect upon German commentators views (and others, it is true) who argue that Greece ‘must’ stick by the austerity package agreed by previous administrations – and that there is no alternative (hmm…. where have we heard this before…) to following the strict / harsh / punitive / counter-productive (delete as you see appropriate) debt reduction policies and prescriptions.
On economic matters, as with many areas of life, nothing need be fixed in stone. As Martin Wolf of the FT has frequently observed on the problems facing the post crash western (and perhaps world ) economies the solutions to the problems we face are unlikely to emerge from the discredited pre-crash norms of economic neo-liberal thinking; the time for radical experiments is now. Maybe, just maybe, we are starting to see one such experiment begin to play out before our eyes.