Greece: The end of the beginning?
- 29 June 2011
- From the section Europe
I think we're at the end of the beginning with the Euro sovereign debt crisis.
To be brutally categoric: the French debt rollover plan, which instead of a three-year grace period now envisages burying 27% of Greece's debt into a 30-year forbearance hole, makes the following difference.
Before, the financial community was worried that the Greek austerity plan would not be passed; then it was worried the austerity plan would be passed but not implemented. Now it only matters to the economics editor of Newsnight in the year 2041.
What the Greek political class is doing - quite ruthlessly and not at all conforming to the patronising stereotypes you find on Wall Street and in London - is fighting for the space to be strategic.
It is going to unleash an East European-style transformation on this country... or intends to. But what it does not want is for that to be unleashed before the Berlin Wall actually falls, to continue the metaphor.
I think today (I'm writing at 2am local time) there will be much grief, literal and metaphoric on the streets. But not enough to derail the parliamentary vote.
However, Greece's strategic problem remains.
It is entirely possible that a non-chaotic, nuanced austerity plan gets through parliament this afternoon but then - whether it hits its own targets or not - simply combines with the negative numbers in the world economy to sink Greece, fiscally and growth-wise.
Greece then becomes the "Credit-Anstalt" of this crisis willy-nilly; that is, it triggers the final reckoning of what started in 2008.
The Eurozone leadership has been weighed in the balance - let's call it tested in the school bean bag race if you like - and it has come last.
Now Christine Lagarde, who started the French rollover deal and fought the Germans to a standstill over compulsory restructuring, gets to lead the IMF.
It's like being the goalie at one end, punting the ball into the opponent's penalty area, switching teams and then letting it bounce into the net.
The Greek people - I have interviewed and spoken to tens of people here these past few weeks - are coping with a mass psychological event of significant proportions.
Largely they are coping well, just as they heroically overcame the terrible moment when the Swastika flag flew from the Acropolis.
But they are bitterly divided between the political elite and the people.
Even the equivalent of the Daily Mail here is calling today "the battle of battles" - that is, from the communists and anarchists to the right of the centre-right they are, even now, determined to mass in Syntagma and pressure the MPs to reject the plan.
No-one even now knows what the outcome will be, except that there will be at some point a traumatic political reckoning. Maybe it even begins today. I will be tweeting.