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Tuesday 22 May 2012

Darling: This is a Greek Versailles Treaty

Tuesday, 21st February 2012

Alistair Darling's suggestion that income tax might be devolved (entirely!) to Scotland as part of a new post-referendum "settlement" was, understandably, the headline part of his Scotland on Sunday interview at the weekend. But his views on the Greek crisis were even more candid:

His assessment of the Greek crisis is astonishingly frank. “The policy they [European leaders] are pursuing towards Greece is sheer lunacy. Nobody actually believes it will work privately, if you speak to people.” Even if everything worked, he notes that Greece would still have debts worth 120 per cent of its national income. “It will still leave the country so indebted and so crippled that it will never pay its way. Frankly, the solution is that it is going to default and the only question in my mind is does it do it in an orderly way, or does it do it in a disorderly way.” Of course the Greeks have fiddled their books and leaders such as Germany’s Angela Merkel have every right to be angry. “I understand all that, but I think to visit on a country like Greece frankly something that would have been worthy of the Treaty of Versailles is absolutely ludicrous. It just isn’t going to work. And the risk is, of course, that if something goes wrong in Greece, then it spreads around the rest of the Mediterranean and Ireland.”

He adds: “You have to say this country is bust, and rather like a bust company, what do you to sort it out? They are going to have to do that sooner or later. Every fix they have come up with has fallen apart and it has begun to fall apart more regularly now – it used to be several months before the next crisis, but it is now on a more regular basis. The policy of austerity alone is never going to sort out Europe’s problems. Europe’s growth has stalled.”

Emphasis added. No-one else seems to think the latest Greek deal will work either so muddling through and hoping Mr Micawber's wisdom will prevail in Athens is just about the best anyone can do. But if, as Darling suggests, even the people backing this measure in public do not believe in it privately then, presumably, someone must be preparing an alternative? Except that admitting an alternative - however politically or economically toxic it might be - would hasten the demise of the latest deal so no-one can contemplate an alternative, far less prepare one. Right? So everyone must pretend a confidence they do not have and hope that nothing happens to call that bet since any call will reveal it to be a bluff.

Meanwhile, shares in Darling Inc have risen so much on the domestic market that I wonder how much more credible, strange as it may seem, Labour might be if he, not Ed Miliband, had succeeded Gordon Brown. That would have been tricky, given Darling's own record in office, but he's distanced himself from his former master quite successfully and, frankly, looks more like a potential Prime Minister than poor Mr Miliband. Of course, perhaps this is just another example of politicians seeming more impressive once they abandon their ambitions for high office.

Filed under: Darling (5 more articles) , Euro (189 more articles) , Europe (749 more articles) , Germany (146 more articles) , Greece (94 more articles)

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Chris

February 21st, 2012 6:38pm Report this comment

Why should we care in the least what a man who has proved definitively he knows nothing about economics thinks about the Greek situation?

salieri

February 21st, 2012 7:21pm Report this comment

A pity we didn't hear more 'candid' (= honest) views more often when Darling held high office. But as they say in Turkey, in the land where there are no sheep the goat is called Abdur Rahman the Wise.

Thig ar Latha

February 21st, 2012 8:04pm Report this comment

I reckon the Tories are glad and thankful he is not in either of the two labour hot seats. I also reckon he is the best bet to lead the campaign
for the Union. Salmond wont be fretful but at least a little concerned. This is speaking as a Nationalist.

Angus McLellan

February 21st, 2012 8:44pm Report this comment

It's amazing the changes that have come over Darling now that he has no responsibilities and, just as important I suspect, no power. It wouldn't surprise me at all if he woke up one fine morning to find that he was a convert to the idea of devolving corporation tax or petroleum revenue duty. As Dr Johnson said, "Depend upon it, sir, when a man knows he is to be hanged in a fortnight," - or even thirty months hence in the autumn of 2014 - "it concentrates his mind wonderfully."

Davey L.S

February 21st, 2012 8:45pm Report this comment

But the point he is making about Greece does seem fundamentally correct doesn't it? after all how much longer can these rescues go on, and how much more can or will the Greeks put up with what is happening.

roman lee

February 21st, 2012 9:19pm Report this comment

The Greeks will continue to put up with anything that Europeans throw at them because they have lost their own Levantine self respect, as such they really want to be seen as Good Europeans!

Baron

February 21st, 2012 9:37pm Report this comment

Baron has said it before, Darling stands taller than any other of the political fruitcakes, it’s common sense informing him, pity he didn’t have more guts to stand up to the Scottish maniac who ran the show before the election.

The one thing nobody seems to have yet explainedd is the mechanism which must pull the country through after the bail-out is over, if the Zorbas had their own currency, after the bail-out the drachma would have sunk to a level attractive for foreign money to come in, export prices would have been nicely competitive, those of imports dear, what is the mechanism to do the same job with the Euro still in place, is there a mad scientist somewhere who is to engineer a mutation of the siesta loving Zorbas into highly disciplined Huns?

Baron

February 21st, 2012 9:39pm Report this comment

salieri, well put, you've made Baron laugh.

Craig Strachan

February 21st, 2012 11:17pm Report this comment

Alex: "Meanwhile, shares in Darling Inc have risen so much on the domestic market that I wonder how much more credible, strange as it may seem, Labour might be if he, not Ed Miliband, had succeeded Gordon Brown."

I don't think another Scottish leader of any U.K. party will be at all viable until the question of independence is settled.

Terence Hale

February 22nd, 2012 8:16am Report this comment

Hi,
The Treaty of Versailles led to Extremism ideology and the Second World War. This
Hydrocephalus of politics is eroding respect for the EU politicians. Where’s there’s (Junck) er there’s money.
Regards Terence Hale

Andrew K

February 22nd, 2012 10:19am Report this comment

Are you sure you mean hydrocephalus, Terence Hale? Or are y ou conflating the Hydra and Bucephalus?

http://en.wikipedia.org/wiki/Hydrocephalus

Simon Stephenson.

February 22nd, 2012 11:55am Report this comment

Why are people incapable of seeing that the reason why it is so difficult for the political elite to accept the reality of the Greek situation is that it has arisen as a direct result of decisions made by the political elite in the past. The elite find it impossible to countenance the thought that Greece and the ClubMed countries would almost certainly have been much better off today if more reasoned, and less idealistic policies been pursued over the last 20 years.

There's been far too much focus on the perfection of the processes, and far too little on the optimisation and sound working of what is actually possible.

Fred Taylor

February 22nd, 2012 2:42pm Report this comment

Baron is right about the difficulty of turning "siesta-loving" Greeks into Germans. But the strange thing (and I say this as someone married to a Greek-American)is that immigrant Greeks are quite capable of turning in one generation into highly successful Americans -- if I'm not mistaken, the next most successful and highly educated immigrant group after the Jews. My wife's parents arrived in the US with nothing in the 1930s (her father's family lost everything in the Asia Minor catastrophe of 1922). The kids and grandkids are wealthy, highly educated and downright workaholic. I suppose laziness and fecklessness are cultural, not genetic. Plus,. of course, emigration frees Greeks from the infamous clannishness and nepotism which is another of their country's lasting curses.

Dadad

February 22nd, 2012 4:10pm Report this comment

We should be sorry for the Greeks, even though we know it's all their own fault. And the sooner they revolt and start the process of leaving the EZ, and the sooner it spreads to the others and the whole EUSSR implodes, the sooner we will get the referendum we all want here. That's the only way it will happen, to have DC's hand forced. And I'm very glad that the Nomenklatura in Brussells are the authors of their own misfortune. They all deserve each other.

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