Margo MacDonald: Blame euro for plight of Greece

Why do you think Greece has ended up in such an unholy mess? Did the Greeks go beyond the limit with their credit cards? Did they buy big boys’ toys, like aircraft carriers, to prove that they were still a force in the world? So how come the UK has got away with it but not poor old Greece?

Because Greece’s financial “convergence” with the other countries in the single currency was a fix: the Greek economy is radically different from Germany’s, but what did it matter if the Greeks stretched their figures to meet their target? Their borrowing in any one year should never have been more than three per cent, but Germany fiddled its “convergence” too

From the very start of the single currency, politics, not finance, governed its performance And make no mistake, most Greeks, Portuguese and Spaniards didn’t argue for virtuous saving and budgeted spending . . . just like us. But whereas we didn’t want to lose our political independence and so resisted the further entrenchment in the EU, these three countries of southern Europe had known the cruelty and inequality of dictatorships, and they liked the feeling of having strong democratic support all around them. All of their leaders and citizens alike know there are still those in their communities who would take advantage of civil unrest to ferment revolution against their democratic leadership.

To fulfil their European dream, all countries acted in character, and when the heat turned up under economies, most were burned because of the euro’s greatest shortcoming – the single interest rate that tried to encompass economies that were like chalk and cheese.

It has taken a while for the euro-nuts in Brussels to admit the truth: neither Germany, the Netherlands nor Finland are willing to share the debt of the poorer southern states and transfer their resources to shore up the economies. If Germany et al want a full fiscal union, and they do, they’ll have to accept that only the EU’s strongest economies can do the business. Therefore, either they leave the eurozone and set up a full fiscal union, which is unthinkable, or Greece, Portugal; and maybe even Spain and Italy have to leave the eurozone, but not the EU, and return to their previous currencies.


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But is this as bad news as it’s painted by serious-looking TV presenters on serious programmes? Well it’s bad news for banks and private financiers who have lent money to the Greeks etc. And, although the UK is out of the euro, it’s not out of the woods, since these bankers have financial interests in the funds that provide our pensions, for example.

In that, the UK economy is caught in the same indecision as the other economies of the EU whose leaders are beginning to question, amongst themselves for the moment, if they can hold to the “austerity” packages they have imposed. People in Greece are so desperate it will be no surprise if the atmosphere darkens should there be another inconclusive election.

Question for George

Well, that’s it settled, then. George Galloway MP says that there should be a second question on the referendum ballot paper. George’s reasoning for this is, he says, “The need for Scotland to have total control over its economy.” More of that in a minute, first let’s look at the call for another question.


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Alex Salmond also says he might want a second question on something less than full sovereignty. Most people with an interest in the topic don’t seem to agree with him, some, because they say he hasn’t the slightest intention of stopping his campaign for independence and some because, they say, he wants to ensure that when the dust has settled, he’s still standing, and the SNP is still the government. Whatever the origin and motivation behind the idea, I judge that there’s now a better chance of a second “safety-net” question.

Elements on both sides of the sovereignty question see a common advantage for their side of a second question’s ability to reassure partially persuaded voters. But I can’t be the only person who fears that a second question (and logically a third option could be argued for on the same basis) will simply make it easy for Westminster to judge there’s too even a spread of support for each option for legislation to be introduced based on what Scots voters have asked for.

But the last word on George Galloway. I have a great respect for his intellect so I was very surprised at his reasoning behind being vehemently against Scotland being sovereign yet just as strong in his support for powers over the economy being devolved to Holyrood. George, to his credit, understands how wrong-headed defence spending, for example, can skew economic performance.

We need power over both . . . that’s the economy too, Stupid.