The Greek government’s economic comedy continues, writes Prince Michael of Liechtenstein. A cocktail of internal populism, preposterous claims, uncoordinated and ridiculous statements, window-dressing and threats are put forward. Greek finance minister Yanis Varoufakis became an international media star on the back of the crisis and offers doubtful entertainment for his global audience.
In the latest developments Mr Varoufakis is promising to repay Greek debt to the International Monetary Fund on schedule. The next 450 million euros repayment is on Thursday, April 9.
Interior minister Nikos Voutsis is putting that in doubt with a public statement which gives priority to Greek cash being used for internal payments such as salaries.
Greek Prime Minister Alexis Tsipras is putting political pressure on the European Union by flirting with Russia. And despite his election promises, the ‘hated Troika’ - the European Commission, the European Central Bank and the IMF - continues to work with Greece under cover of a new name, ‘The institutions’.
This could all be highly entertaining except that it is a tragedy for the Greek people. It also has a negative effect on European politics, even though it is clearly a homemade Greek problem. The only blame the rest of Europe must accept is that the Greek disorder and governance failure had been tolerated and purposefully ignored for such a long time.
It is probably time to end the agony and further transfer payments to Greece would be wasted, as in the past.
Greece could issue government notes to pay salaries. This has been proposed recently. But GIS expert, Professor Enrico Colombatto raised this about two years ago with a sort of internal currency running in parallel with the euro. California did this when it was bankrupt, and in Greece’s case this could develop into a national currency, weaker than the euro, but allowing a gradual exit.
It is obvious that Greece’s government is unable and unwilling to reform, to increase its economic productivity and reduce an oversized state. The only alternative is a currency which can devalue.