After Greece failed yet again to reach a deal with European leaders, it is time for the Europeans to accept the fact that Greece simply wants out of much of its debt and already agreed-to austerity terms. The European Union and the euro have been held hostage by Greece for long enough, and Greece has now taken up more than its fair share of time, considering its liabilities and overall contribution.
Germany, France, the International Monetary Fund (IMF), the European Union and the European Central Bank (ECB) have all tried to reach a deal with Greece in what is effectively yet another bailout with more favorable terms. The one consistent outcome is that all talks have failed at every turn. Greece’s Syriza socialist party was elected with the promise to undo many of the austerity measures and terms that had previously been agreed to.
What is more than obvious is that Greece’s leadership simply wants a “do-over.” Greece’s leadership wants to end or minimize many of its previously agreed-to austerity measures. Greece is trying to get creditors to allow it to play by a different set of economic rules than other nations.
Perhaps it is time for the Europeans to finally admit that Greece just does not deserve to have the euro as its currency. Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis have been delaying and delaying a resolution at each and every turn. The IMF even simply walked out of the negotiations.
With Greece’s threats to hold the euro hostage and the endless threats to leave, the time has arrived for the Europeans to find out what happens. When it comes to which European nations are really in charge, have the Europeans really allowed the Greeks to be this important and powerful?
24/7 Wall St. has come up 11 actions and tactics beyond further delays that the rest of Europe and its leaders can take to try to force Greece’s politicians into acting like a Western nation. Allowing Greece to act like a banana republic just hasn’t worked for anyone yet. Some of these methods of dealing with Greece would be akin loosely to Machiavellian concepts, although historically they would be considered very muted. Sun Tzu might even be highly unimpressed with these efforts.
There are also some admissions here up front: Some of the tactics may not be legal (not yet) and may require legislative action. Some of the tactics are cruel, and these tactics are also predatory. Unusual events usually are accompanied by unusual reactions.
Another consideration is the risk that any of these proposed actions and efforts might bring. Admittedly, there are of course many risks. Another consideration is what has been formally published about Greece’s recent economic history regarding its bailouts and how that compares to today.
1. Discourage and Shame Tourism to Greece
Greece gets a better deal from tourism than it gives back to Europe. The northern European member states could embark on public campaigns telling their citizens that every time they vacation in Greece they are just giving Tsipras and Varoufakis a stronger leg to stand on. If the tourism were to dry up in the Greek islands and in the many historic destinations, the local economic pressure would become far worse than it has been so far. The CIA World Factbook shows that tourism provides 18% of gross domestic product (GDP).
2. Threaten to Cut Off Banking Access Today
Greek banks have seen net national bank deposits get smaller and smaller. The reasons are many, but two risks are nationalization and deposit seizures. There has been an ongoing risk that the Greece socialists could nationalize all the major banks. As far as seizure, Greek depositors likely know that the ECB or the Greek government could use a strong hand here. If Greece’s banks end up getting nationalized, would they give deposit holders a haircut? Hint, go ask depositors how much they like it in Cyprus.