The Greek crisis will end in calamity: You can’t reconcile the irreconcilable

John Hulsman
We are, exactly as I said, on the edge of the abyss regarding the Greek crisis (Source: Getty)
Despite conventional wisdom almost constantly (and falsely) reassuring the public in literally thousands of columns that all would come right in the end, here we are, exactly as I said, on the edge of the abyss regarding the Greek crisis. The latest ‘final’ deadline for Greece to release the magical last €7.2bn of its current bailout tranche – in return for meaningful reforms, of course – is roughly the end of this month.

While it is hard to believe the unicorn hunters – those who think a deal is quickly realisable – will ever really accept reality and give up, the confluence of Athens failing to pay the IMF this month, and failing to secure a third and necessary bailout, really would spell the end this time. As Greek Prime Minister Tsipras has revealed himself to be a Hemingway fan, let’s put it in Papa’s terms: this is when the bell tolls.

And it is still highly likely that there will be no deal, and certainly not one that puts this crisis on a remotely manageable footing.

Why have I been saying this for the past 20 months? Or, to put it more bluntly, what do I know about the nature of the Greek crisis that the legions of euro-cheerleaders (and a subset of Varoufakis worshippers) don’t? The simple, compelling answer is that I have been here before, in the case of the equally soul-destroying Palestinian-Israeli talks, and came to one profound conclusion from the thankless experience: you simply cannot reconcile the irreconcilable. It is Hegelian nonsense of the first order that so many people think negotiations, that is ‘talking,’ inevitably leads to agreement.

In the case of the Israeli-Palestinian talks, I was part of one of several Track II efforts in the 1990s to nudge the Palestinians and Israelis toward a final settlement. To that end, I helped draft a final Peace Plan that would have passed muster with a majority of grad schools throughout the world, and even (privately) with many leading Palestinians and Israelis as well.

Without going into the details (as I am not allowed to), let me just say the plan was reasonable. The plan was balanced. The plan made sense. The plan could be intellectually defended. But the plan went nowhere for the fundamental reason that neither side proved either willing or able to compromise on much of anything, so different were their world views, and so attached were both sides to them.

While, intellectually, Palestinians might in theory admit in some cases that Israelis might just have a point, and while Israelis might abstractly say to me that the Palestinians have had a rough ride and Israeli compromises were the only just and possible way to reach a deal, no one truly internalised these intellectual niceties. At the very least, neither side was prepared to make the slightest move toward practising what they privately preached, and accept that their world view – as is true of all world views – had limits and wasn’t the whole story.

Which leads us back to Greece. In theory, Syriza’s leaders may quietly accept that Greece is not wholly without blame for the mess it finds itself in. It did lie about its numbers to join the euro, Greeks do stop working at a scandalously young age and collect pensions, and Greek society has been far too tolerant for far too long of its wildly corrupt elite. Likewise, calmer heads in Brussels may accept (as the IMF does) that debt relief is necessary if Greece is ever to recover, that the initial bailouts served merely to get feckless German and French banks off very large hooks, and that austerity has not been a raging success.

So what if real debt relief were offered, with the notion of a balanced budget from here on out replacing the false rigour of primary surpluses, and Greece was given its last bailout tranche and a smaller third bailout by the end of the month? In turn, what if Greece agreed to genuine pension and labour market reform, and to prune its hideously bloated public sector, all the while still paying down its debts? The answer is nothing would happen because neither side could bear to make the eminently reasonable concessions this would involve, as such moderation would call into question both sides’ lamentable righteous indignation.

To do so, one side (or both) would have to jettison their beloved – if deeply flawed – world views: that Greece is either a victim, or a land of shiftless scroungers. Complexity is simply too much for anyone in this crisis to bear.

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