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The most important election in history

June 16, 2012 3:47 pm

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Stephen Bush

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It’s the most important election in history tomorrow. It could destroy the Obama Presidency and stillbirth Hollande’s. It could bring about the economic collapse of Spain and the political destruction of the German Christian Democrats. It could, potentially, plunge the whole of Europe into an unprecendented recession.

Tomorrow, Greece goes to the polls, with the centre-right New Democracy Party on level pegging with SYRIZA, a motley crew of left-wing splinter groups. This isn’t David Cameron versus Respect. This is David Cameron versus an alliance between that weird bloke at Occupy who believes Ken Livingstone introduced the Oyster card to track his movements and that weirder bloke at a Stop the War protest wearing a black mask.

SYRIZA – a pun-tastic Greek acronym of its composite parties meaning ‘the roots’ – or the Coalition of the Radical Left started out as a smörgåsbord of parties of the left-wing fringe, a collection of Maoists, Trotskyites, Eurocommunists and radical ecologists.. To give you an idea of where SYRIZA stands: if Jenny Jones joined SYRIZA, she would be regarded as a dangerous revisionist. What you might call a ‘Bennite’, they would call a ‘dangerous enemy of the revolution’.

Prone to schism and division – some of SYRIZA’s founding entities are the splinters from splinter groups – SYRIZA would almost certainly have gone the way of every alliance of the variegated left that came before them, but they were in the right place at the right time. When George Papandreou’s Panhellenic Socialist Movement (PASOK) got back into government in 2009 after a five year absence, they rejoiced at party headquarters, but it was an election that may well have destroyed PASOK as a governing party. The Hellenic model of ‘spend now, pay never’ exploded just as PASOK were taking office. First as the governing party, and then as part of a technocrat-led coalition, PASOK had to implement a program of screamingly unpopular cuts. New Democracy – the party of the right – was also badly damaged by its participation in the coalition, but it retained far more of its core. PASOK has gone from a perennial governing party of post-war Greece to a party that is consistently polling below 10%.

That leaves SYRIZA as the only left-wing entity still standing; as one pollster put it: “Public opinion isn’t in love with [SYRIZA}, it’s angry with the others.”. Unlike most European ecology parties, SYRIZA has no experience of government, even at a local level. Even the German Left Party has a moderate wing with an experience of and interest in government. SYRIZA does not. Even with the new fifty seat ‘plurality bonus’ that comes into play in this election – introduced in 2007, but with a grandfather clause that means that this will be the first time that it is used – it is likley that both New Democracy and SYRIZA will be unable to govern alone. After the May 2012 poll, Alexis Tsipiras, SYRIZA’s young leader, refused to form a coalition with any pro-austerity party, eschewing even an alliance with PASOK. Unless SYRIZA can achieve a majority by itself, which is highly unlikely, Tsipiras may be forced into a position he has never occupied in his entire political career: one of compromise.

The problem is, no-one knows for sure whether he can take SYRIZA with him. The son of a construction magnate, his only jobs have been within the party machinery, and he was gifted the leadership by his predecessor and mentor, Alekos Alvanos. It may be that his swift discovery – and even swifter abandonment – of moderate language after the May 2012 poll highlights the reality that he can’t deliver a reliable majority even if SYRIZA is given one at the polls. After his success in May, his party was overrun with new entrants – some from the familiar and schismatic far left, others from what one member of the outgoing government has termed ‘the coalition of the drachma’, a group determined to resist any or all reforms – and Tsipiras’ ability to lead them has never been put to the test.

Winning tomorrow will be the easy part. Governing may well be beyond him.

European Talking Points:

So, you’ve just been elected President of France and your party is well on its way to a working Parliamentary majority. What could possibly go wrong? Well, your girlfriend could tweet her support for an independent candidate standing against your ex. “Good luck to Oliver Falorni,” tweeted new First Lady Valerie Trierwaller, of the man standing against Segolene Royal, “A man who has done nothing wrong, and works hard for the people of La Rochelle.”. Mme Trierwaller has been criticised by a number of Socialists for her Tweet, including the new Prime Minister Jean-Marc Ayrault.

What’s a guy like you doing in a place like that? That’s the question being directed at Jürgen Trittin, parliamentary leader of the German Greens, after he attended this year’s Bilderberg Conference. A former great hope of the party’s left flank, his former loyalists were left dismayed and angry by his visit to the gathering of the world’s power-brokers. Sven Giegold, a Green MEP, has supported Trittin’s decision to accept Bilderberg’s invitation. “One should always accept invitations,” Giegold opined, “As long as they are not from mass murderers, war criminals, right-wing extremists or anti-Semites.”

You turn if you want to, Mario Monti’s not for turning. As Italy feels the effects of tax rises, spending cuts and economic stagnation, Italy’s economist-turned-Prime Minister issued a call for unity. His coalition – which has never quite been the same since the tussle over labour reforms in April – is looking distinctly worn around the edges. An election in early 2013 looks most likely. The question is, though, with all the major parties having supported Monti’s government, what would such an election look like?

Graham Peasantry

lol
http://twitter.com/JamesKelly James Kelly

Tomorrow’s election is clearly of unusual importance, but “the most important election in history” may be something of a stretch. The German elections of the early 1930s proved to be fairly significant, for example.
AlanGiles

You seem to read so many finger-wagging tirades, interlarded with dire references to “the far left” and playground taunts like ” weird bloke at Occupy who believes Ken Livingstone introduced the Oyster card to track his movements and that weirder bloke at a Stop the War protest wearing a black mask.”, that at times you could be forgiven for thinking you are reading the Daily Telegraph.

Or has LL instituted a “Rob Marchant Essay Award” and Mr Bush one of the entrants?.

The problem with his thinking – like so many of that shower – is that while they see the left in terms of “Qfar left” and “hard left”, they have nothing to say about the extreme right wing of the Labour party.
- John Dore
  
  More “Oh yes your a Tory crap” Alan? I do wish you’d stop it and engage in a debate, but that is the disease of the far left isn’t it? Anything you fail to argue against or dont like is by default Tory.
  Met any of the feckless recently Alan?
- http://twitter.com/stephenkb Stephen Bush
  
  Hi Alan,
  
  Thanks for reading. Couple of things, however.
  
  You seem to think this is an opinion piece. It isn’t. It’s reportage, an attempt to summarize, in an engaging and hopefully occasionally enlightening fashion, what’s going on in European politics from a left perspective. I don’t think you can plausibly claim that there is ‘finger-wagging’ or even an argument, really, in this or any of my European work for LL. What there is an introduction to the participants involved, coupled with some general predictions about how events might unfold.
  
  What there is an attempt to genuinely explain European politics. What you call ‘playground taunts’ I think is a useful shorthand. You seem to be under the impression that SYRIZA is equivalent to the British far or hard left; my point is that it is a very different type of beast entirely. SYRIZA’s mainstream would be reasonably eccentric at a British Occupy camp. I think your comment is symptomatic of one of the British Left’s ‘big problems’: an insularity which leads it to take positions it doesn’t really hold because of a mistaken sense of solidarity. (For example, a certain type of Labour revisionist might make common cause with Sarkozy because of his labour market reforms, while ignoring or simply being unaware of his anti-immigrant rhetoric) I suspect that – out of your sympathy with elements in British politics that might be dubbed ‘far left’ – you’re sympathising with SYRIZA, or reading into this description of them some ‘object lesson’ about British politics and the unsuitability or otherwise of the British ‘far left’ for government.
  
  Best,SB
  - AlanGiles
    
    Thanks for your response Stephen. I am actually not on the hard or far left, I would have been considered until the days of Blair and New Labour quite mainstream.
    
    perhaps I am being oversensitive because we have had to endure so many pro-Progress pieces lately and if you dare to suggest that the right wing isn’t the only credible wing you get abuse from the headbangers like Purple Booker and “Mr. Dore” – whoever he is.
    - http://twitter.com/stephenkb Stephen Bush
      
      Sorry, that was an incredibly crass assumption on my part!
      
      For what it’s worth, while I am very much from the Progress/revisionist wing of the party, I agree that the right of the party is often every bit as anti-democratic as the opponents it decries. I thought the response on the Progress website to the GMB was exactly right – measured and supportive of pluralism – but many of the responses have been just as bad as trying to ban Progress. The foaming at the mouth about ‘the Trots’ in some circles is just very, very strange. All too many people in the Labour Party believe they have a monopoly of wisdom.
      - AlanGiles
        
        Again thanks for responding Stephen. No offence taken, and at least you are that rare example of a friendly Progress supporter who seems to recognize there can be extremes on right as well as left
      - AlanGiles
        
        Again thanks for responding Stephen. No offence taken, and at least you are that rare example of a friendly Progress supporter who seems to recognize there can be extremes on right as well as left
Derek

And if it all crumbles who will be to blame ?

You can only bully a country for so long : when they have nothing else to lose why should the Greeks concern themselves about others – Europe has been less than charitable to them despite the righteous spin that Germany and the rest of Europe, except France in recent times, have promoted through a willing media. If there was serious intent to help Greece the fat cat investors would have been forced to take a 100% loss – after all what do they say about speculation ? The value can go down as well as up. The Eurozone would lend at a minimal interest rate or freely and made the repayment terms over a period of perhaps 50 years thus giving the country time to sort itself out.

Instead the EU have acted like loansharks using their financial might to dictate terms that are causing untold harm to the citizens of Greece.

Greece was encouraged into the Eurozone and clearly due diligence wasn’t at the top of the agenda for those pressing ahead with the Euro.

Predominantly Germany and France have only themselves to blame if this all goes wrong tomorrow.
- Dave Postles
  
  ’The Eurozone would lend at a minimal interest rate or freely and made
  the repayment terms over a period of perhaps 50 years thus giving the
  country time to sort itself out.’
  
  Exactly. Instead, the ECB dished out electronic money at low interest rates (1%) to banks across Europe (including Barclays) in short-term loans. For what purpose?
  - jaime taurosangastre candelas
    
    Why would the Eurozone lend at a minimal interest rate if Greece had just defaulted by 100%? That seems to be counter-intuitive to me. No private investment money would go to Greece either if they defaulted by 100%.
    
    Argentina defaulted by 65% a decade ago and found themselves locked out of the credit markets entirely for 9 years, and had to rely on the IMF and Venezuela. The Eurozone countries seem unwilling to lend bilaterally, and the rules appear to prohibit the Euro institutions doing so as well. Of course, the rules may be changed, but that does not seem to be happening as the Germans do not permit that.As I understand it, the systemic problem is not with the Greek banks, as it is in Spain. The problem is that the Greek government spends far more money than they raise in taxes.
    
    {EDIT – That should have been in direct response to Derek, not to Dave}
John Dore

I’m not sure that the personalities or Greek politics are that relevant. For the sake of the Greek people divorcing the Euro is a better alternative.
The Euro was a good idea in concept for the politico’s, you only need to look at the suffering of the people to know what needs to happen. Allowing the weaker countries to walk will free them from the shackles of austerity and allow them to compete is the better option.

It’s amusing to watch Hollande, trying to spend Germanys money. There are two outcomes: Germany accedes or Hollande is humiliated when he realises he doesn’t have the power to deliver what he promised the French people, when he was elected.

How would it destroy the Obama Presidency?

Stephen, I am interested to know why you wrote this article.
- http://twitter.com/stephenkb Stephen Bush
  
  Hi John,
  
  Cheers for reading. Each week the body of the article deals with a major issue in European politics, while the talking points take a broader view. It seemed to me that the major issue this week was the Greek elections and the possible success of SYRIZA.
  
  I think it’s eminently plausible that a Greek exit would lead to crisis in Spain, Portugal and Italy, which would plunge Europe into recession, end the American recovery, and hand the election to Mitt Romney.
  
  That said, I also think the most likely outcome tomorrow is a narrow win for New Democracy, or, if ND is a couple of seats short, a coalition between ND and what’s left of PASOK.
  
  I’m not convinced a Greek exit is actually possible – what worth would a new drachma actually have? how does exit work? - and I don’t think it will happen, simply because of the greater risk that exposes to Spain, Portugal, Italy, etc. What I expect is a quasi-federal solution. The current situation, where, as you say, Hollande seeks to spend Germany’s money, can’t last. Germany will ultimately end up having to spend, but it won’t be a blank cheque by any means.
  - John Dore
    
    I dont think the weaker economies leaving the Euro would plunge Europe into recession, quite the converse. It would free many for a fresh start and allow the Euro states to refocus.
    
    This turmoil will hand Obama the Presidency, He will be able to pin any of Americas economic woes on the Turmoil and based on the remainder of his performance he will win an election. I dont think Romney is a strong opponent. The Cameroons have already deployed this strategy.
    As for the Greeks leaving the Euro, while the process is straightforward, the initial process and stabilising of the exchange Drachma to Euro will be frightening for the Greek people.I’m very grateful that you are responding to the comments, its great to have a discussion with the authors.
JS

Isn’t there another election going on at the moment that is also rather important?
Eastender

“It’s the most important election in history tomorrow. It could destroy the Obama Presidency and stillbirth Hollande’s. It could bring about the economic collapse of Spain and the political destruction of the German Christian Democrats. It could, potentially, plunge the whole of Europe into an unprecendented recession.”
What utter twaddle.

What happens in Greece wont have a huge effect outside of Greece, it is simply too small. If it all goes horribly wrong ,the chances are it wont, it will impact on some European banks, notably French ones and will make the situation of many people in Greece far worse than it already is. It will not however be the end of the world. The situation in Spain is far more serious as far as the rest of the Eurozone is concerned. The CDU/CSU in Germany will survive whatever, it has very deep roots in German society.

SYRIZA is a coalition of dreamers lead by a smart politician, it might pull off a surprise victory (the various runes suggest it wont) but it will then be confronted by the reality of the situation and would almost certainly fall apart under the pressures created by the compromises needed for government. Some sort of wide coalition would be formed. This all seems rather odd from a British perspective where we seem to expect that stable governments are formed as soon as an election result is declared, in most countries this simply isnt the case, it often takes some time for the government to emerge. Politics as normal.
http://twitter.com/stephenkb Stephen Bush

Hi John,

Cheers for reading. Each week the body of the article deals with a major issue in European politics, while the talking points take a broader view. It seemed to me that the major issue this week was the Greek elections and the possible success of SYRIZA.

I think it’s eminently plausible that a Greek exit would lead to crisis in Spain, Portugal and Italy, which would plunge Europe into recession, end the American recovery, and hand the election to Mitt Romney.

That said, I also think the most likely outcome tomorrow is a narrow win for New Democracy, or, if ND is a couple of seats short, a coalition between ND and what’s left of PASOK.

I’m not convinced a Greek exit is actually possible – what worth would a new drachma actually have? how does exit work? - and I don’t think it will happen, simply because of the greater risk that exposes to Spain, Portugal, Italy, etc. What I expect is a quasi-federal solution. The current situation, where, as you say, Hollande seeks to spend Germany’s money, can’t last. Germany will ultimately end up having to spend, but it won’t be a blank cheque by any means.
Mike Homfray

This is what happens when starving a country into submission is seen as appropriate. Germany has benefitted hugely from being the big shark in the Euro pond. But sometimes the sprats fight back. PASOK only have themselves to blame – there needs to be a major shake up to shift the EU out of it’s complacent neo-liberal direction. I hope the Greeks get the ball rolling
http://twitter.com/sprogglie Sprogglechops

“ Most important election in history”? What pure hyperbolic rubbish. I can think of a whole bunch of elections that were more important. Just to take one year – 1932 : election of Roosevelt and certain elections in Germany. I think that they were by far more important than those in Greece.

(Written before spotting James Kelly’s post below)
Brumanuensis

I think it was Michael White in this morning’s Guardian who wrote that he now understood how people in the 1930s must have felt: the sheer listless hopelessness of it all, the sense that everything was going wrong and no-one knew what to do. I, for one, now understand what motivates people to set up ‘pro-anorexia’ websites. The European policy elite are fiscal anorexics: their whole vision is as distorted as the anorexic who looks in the mirror and seeing how emaciated they are, complains that they’re getting fatter.

Or in a more historical vein, Merkel is another Heinrich Bruning. The same smug complacency, the same idiotic adherence to orthodoxy, the same indifference to democracy. Looking at Europe now, the thought that keeps coming to mind is ‘Those whom the Gods wish to destroy, they first make mad’. We are led by madmen and Europe is being ruined.

SYRIZA may be flawed, but no more so than the ‘respectable’ parties. It doesn’t matter who wins tomorrow: Greece is doomed and so is the Euro, at least in its present form. Voting SYRIZA will just bring on the end a little quicker. If I were a Greek, I’d just want to get it over with.
Amber Star

SYRIZA – a pun-tastic Greek acronym of its composite parties meaning ‘the roots’ – or the Coalition of the Radical Left started out as a smörgåsbord of parties of the left-wing fringe, a collection of Maoists, Trotskyites, Eurocommunists and radical ecologists..
———————–
I hope they win. I hope the Greeks feel the fear but vote for them anyway.

The right & center throughout Europe have done absolutely nothing for the Greeks. They talk of Greek profligacy & ignore the German captains of industry who bullied & bribed Greek politicians into buying sub-marines, other weaponary & infrastructure projects which they couldn’t afford. e.g. 1 Billion Euros for German submarines which do not even work!

So good luck to SYRIZA! - I hope they scare the beejeebers out of the selfish centerists.
http://twitter.com/mistyblulabour dave stone

Here’s a chilling perspective on what might follow tomorrow’s election:

http://www.social-europe.eu/2012/06/the-end-of-the-world-as-we-know-it/
- derek
  
  Chilling read and a very real scenario.We might even reach that road quicker than expected as Russia fuels it’s naval fleet on standby to head for Syria.Hot spots all over the place and the austerity measure have only added fuel to those flames.
  - treborc1
    
    World war 3 then the penguins of the left can take up arms.
    - Dave Postles
      
      Penguins – Linux – we are pacifists.
      - jaime taurosangastre candelas
        
        Have you asked any real penguins? I saw a documentary with my daughter in which the Emperor penguins alternately illustrate some remarkable behaviours – the males spending all winter protecting the eggs, huddling together for warmth and letting the females go fishing in the ocean – it seems egalitarian. And then in the spring when the chicks hatch the adult males will often attack the chicks of other males, and also returning females to prevent them from feeding their chicks. Also, females whose own chick has been killed then attacking other females in order to forcibly adopt their chick. Rather brutal.
        
        Maybe there is an analogy with political parties, unions, think tanks and factions.
      - treborc1
        
        left leaning penguins, or are they from the right wing.
        
        It was the sight of a young male Adélie penguin attempting to have
        sex with a dead female that particularly unnerved George Murray Levick, a
        scientist with the 1910-13 Scott Antarctic Expedition. No such
        observation had ever been recorded before, as far as he knew, and
        Levick, a typical Edwardian Englishman, was horrified. Blizzards and
        freezing cold were one thing. Penguin perversion was another.
        Worse
        was to come, however. Levick spent the Antarctic summer of 1911-12
        observing the colony of Adélies at Cape Adare, making him the only
        scientist to this day to have studied an entire breeding cycle there.
        During that time, he witnessed males having sex with other males and
        also with dead females, including several that had died the previous
        year. He also saw them sexually coerce females and chicks and
        occasionally kill them.
        
        http://www.guardian.co.uk/world/2012/jun/09/sex-depravity-penguins-scott-antarctic
      - Brumanuensis
        
        I asked a penguin about that once. He told me to sod off, because he had squid to catch.
        
        No class those birds, honestly.
    - derek
      
      I hope not? or else we’ll all be rockhoopers!
      
      http://english.ruvr.ru/2012_06_16/78293773/
- Dave Postles
  
  The level of debt to GDP is causing some anxiety in India, but it is mostly held internally. It’s not far removed from GB debt/GDP levels.
aracataca

Helpful piece Stephen but I still don’t get a real sense of what SYRIZA is. I know, for example, that it isn’t a sister party of any of the Trostkyite parties here, they seem to champion what seem to be tiny, tiny parties in Greece. Might SYRIZA not be a symptom of what happens when you impose such austerity that OAPs are compelled to seek out their evening meals from the contents of bins in the streets? In this regard the German elections of the early 1930s might not be too distant a comparison to make with the election being held in Greece tomorrow. In both instances one can perhaps identify an odd, eclectic collection of people who sweep up votes by promising to put everything right very quickly and who identify a very specific external, but opaque. ‘enemy’.
- http://twitter.com/stephenkb Stephen Bush
  
  Thanks for reading it! It’s difficult to pin SYRIZA down; they are an odd bunch, in that they are a composite of some parties that where originally much smaller than some of the sister parties of Trotskyite parties here. They came out of the protests against the G8 summit in Genoa in 2000, and were/are a disparate bunch. And then there are the ex-PASOKers and other radical elements who are flocking to them now. Very confused stuff.
  
  I agree that the 1930s precedent is a good one – of the reasons why I’m a bit lairy of the whole ‘oh, 1932 was MUCH more important’ comments here – and SYRIZA are re a perfect example of what happens when, in the name of economic good practice, you force a country to endure a frankly terrifying level of austerity. If Labour joined the Tories in a grand coalition that liquidated the NHS, sold off the universities and then told everyone they had to work until their late 70s, I wouldn’t be surprised if we saw the Penguin Leftist Party making great gains in the next election. Scary times.
http://twitter.com/DelroyBooth Delroy Booth

“What you might call a ‘Bennite’, they would call a ‘dangerous enemy of the revolution’.”

Sounds like Progress to me.

Anyway I’m hoping desperately for a Syriza victory, it will be an earthquake that will destroy the austerity consensus that is destroying so many lives accross europe.
- jaime taurosangastre candelas
  
  I don’t believe a Syriza victory would be the earthquake you describe that destroys the austerity consensus (if such a thing exists). It is more likely to destroy the Eurozone as a second order effect, having first caused Greece’s departure from the Eurozone either voluntarily or by ejection. If Spain, Portugal and Italy have to stand on their own, there would be more not less austerity in those countries – they need money from somewhere.
Peter Barnard

What is unfortunate – not to say regrettable – about the Greek elections tomorrow is that, no matter what the result, our friends in the financial markets will still call the tune.

The Greek economy is worth about 1.5% of the total of the combined economies of 29 Western European countries. There is something horribly wrong when an economic minnow can cause financial havoc on the scale that some seem to be anticipating. It’s like the corner shop with an overdraft at Barclays that it can’t pay causing the local Tesco mega-market, also with an account at Barclays, to go out of business.

I suspect that the something horribly wrong lies in the financial markets and, if a finger has to be pointed at anyone in particular, it has to be on the other side of the Atlantic towards Alan Greenspan and his infamous “Greenspan put” : no matter what problems the financial markets cause themselves, introduce bucket-loads of more liquidity so that the banks aren’t embarrassed in a big way.

Until the mature Western democracies tackle the financial markets and their shenanigans, we will find ourselves in a continual “crisis.” We will also find ourselves hostage to these parasites.

It is to be noted that the prime beneficiaries of the Greenspan put were not Mr & Mrs Main Street, USA (nor Mr & Mrs on the top deck of the Clapham omnibus) ; rather, they were to be found in Wall Street and Canary Wharf.

If I were a revolutionary, I would blow up the buildings holding the top ten financial institutions (over a weekend) and when all the “traders” (and the hangers-on in the legal and accounting professions) turned up for work on Monday morning, they would be told to go and get a proper job, making widgets or something similar.

One can fantasise …
- jaime taurosangastre candelas
  
  The problem is Peter, money is all a gigantic confidence trick, although it is very useful in day to day life. It relies upon “momentum” to keep moving around the system – exactly what I believe you have previously observed is a problem with hundreds of billions sitting on balance sheets remaining uninvested and unproductive. But if people cannot trust that the money system itself will work (which is the implication of blowing up the banks), you will be back to barter quite quickly. How will you pay for the Chinese components for your widgets, anyway, if the money system is destroyed? Maybe that is what revolutionaries fantasise about….
  
  Maybe you should be buying some proper money, available tax-free in one ounce Britannias from the Jewellery Quarter in Birmingham, not too far from Chester. £1035 an ounce as of just now.
  - Brumanuensis
    
    But Jaime, that’s precisely the point about gold. It’s shiny yellow metal. It has no intrinsic value and it’s use is largely down to a combination of relative scarcity, fungibility and, until fairly recently, the lack of a printing process adequate to the needs of paper currencies.
    
    The gold standard really is just a barbarous relic. It only keeps prices stable in the long run through short-term volatility and a tendency to exacerbate slumps by embedding deflation. It’s not a coincidence that the countries that came off the gold standard latest, in the 1930s, i.e. France, took the longest to start recovering from the recession. Ulitimately, fiat currencies, whatever their disadvantages, enable much more flexible responses to economic downturns. Imagine if the BoE hadn’t used QE in late 2009, or interest rates hadn’t been cut: a very severe recession would have been far worse.
    - jaime taurosangastre candelas
      
      Brumanuensis,
      
      I’m sure that you are correct in at the very least an academic sense, and can see the logic in your argument. My perspective is however different: what works in reality, and in my lifetime? It is of no concern to me if your arguments are proved to be correct in 60 years from now when I expect to be providing food for worms.
      
      For me, it is a balance between the short term idiocies of governments, and the long term idiocies of billions of people believing that fiat money is deeply suspect, due to the short term idiocies of governments. I do believe that a historical review would show that there have been thousands of fiat currencies, all but the still existing ones destined for failure, and the still existing ones looking nervously at the statistic that fiat currencies tend on average to last for 70 years on average before some foolish decisions make them valueless.
      
      If my children choose to invest in seashells or coconuts or land or tulips, that is up to them. I will teach them to trust no politician with stewardship of a fiat currency.
      
      Did not that perfect example of economic brilliance Gordon Brown very proudly tell the House of Commons that he had sold off British Gold to invest in Euros? He did. Does that look like a good investment now, when the deal has cost us £21 billion pounds? And how many more weeks do you give the Euro until yet another fiat currency dies?
      - Brumanuensis
        
        Jaime, I thought the only problem with Brown’s gold sale was that he botched the selling process. I’m of the view we should get rid of the rest of the gold in the BoE’s vaults and invest it in something useful. Gold prices can slump too, as they did in the 20 year period between 1982 and 2002, so it makes no sense to tie up national resources in stock of limited value. It’s a bit like the biblical parable of the vineyard worker who buries his pay in the ground and is chastised for his foolishness, whilst his fellow workers invested their pay and were praised.
        
        This isn’t just an academic point. Plenty of gold currencies have failed too and as the Great Depression showed, having a currency based on a commodity that kept its value exacerbated disasterous economic downturns. This idea of gold-based stability is a myth. In 19th-century Europe, countries on gold standards oscillated between explosive booms and violent slumps (like the ‘Long Depression’ of the 1870s and ’80s). And ironically, most of the fiat currencies you dislike are not run by politicians: the UK, US, Euro and Yen are overseen by independent central banks, removed from direct political control.
        
        Of the investments you recommend for your children, I would only really second ‘land’ btw.
        
        An added irony. I live right next to the Jewellery Quarter in Birmingham; a third (rough estimate) of the shops on the main street leading up to Chamberlain clock tower are cash-for-gold shops, trading gold for fiat-currency cash.
      - jaime taurosangastre candelas
        
        Brumanuensis,
        
        the selling process was certainly botched, but to be fair to GB I believe there were some rules he had to follow about public pre-announcements, which of course affect the markets. But that was only a few percent.
        
        The big problem with GB’s gold purchase was that he made a short term gain based on euro-froth, but is now about £21 billion down on the deal, and that could get much worse if you believe the Euro is in for a bad time, or worse going to cease to exist. Too short-term thinking.
        
        I’d also observe that your example period of 1982-2002 is to my mind only very short-term. I’ve got a gold Mexican 50 peso coin on my desk which was the first gold coin I bought, at the age of 16 from my part time earnings working as a groundsman in 1981, which I bought for about £140. I don’t believe I’ll ever sell it, and today it is worth about £1200. I keep it in front of me as a reminder of the long term. Everything else is buried.
        
        I’m not sure what you mean by “gold currencies” – there is either gold, or there is fiat. Politicians trying to pretend their currency is backed by gold are serial liars, and proven so when they abandon gold standards and the currencies plunge.
        
        Land is certainly the best current investment, but you need to spread it about to avoid the impact of governments doing stupid things like compulsory purchase. I have land in Chile, Canada and Devon – not so much, a total of just over 20 acres, but there is at least redundancy in having it in three countries to avoid the idiocies of one government.
        
        You need to be careful with the gold shops. There is a company who travel about putting leaflets through the letterbox, and one that we had showed a cash price of only about 15% of gold price. It is worse than the pay day lenders – they play on people’s fears.
  - Peter Barnard
    
    I didn’t say destroy money, Jaime ; what I was driving at was destruction of the activities of the parasites in financial services.
    
    On gold : if we moved to a system in which gold was the only acceptable medium of exchange, commercial life (and day-to-day life for people) would freeze in pretty quick order. How is a distributor in the UK going to pay for 20,000 TV sets manufactured in South Korea? By shipping over about a quarter of ton of gold? (When Standard Oil of California signed the first concession agreement with Saudi Arabia in 1932, King Abdul Aziz insisted on partial payment in gold and that’s exactly what SOCAL had to do – buy gold in London and have it physically shipped to Jeddah).
    
    Are people going to be paid in gold? In which case, the costs of distribution will soon become apparent. When you apply for a mortgage, on completion of the sale will the lending institution have to ship over (say) £200,000 of gold to the vendor?
    
    Gold – and only gold – as a medium of exchange is completely impractical ; besides which, I doubt that there is sufficient gold in the world now to lubricate the production of goods and services.
    
    Money, in whatever form, has three functions : a medium of exchange, a unit of account and a store of value. You are concentrating on only the last item. I would remind you of the saying, “All it takes to be an investment genius is a rising market and short memories.”
    - jaime taurosangastre candelas
      
      Peter,
      
      no that’s not what I am getting at. Banks are useful to allow for international transfers of credit and to settle bills. No one is talking of physically handing over metal. But the system to do that is based on trust. So money in terms of electronic units is useful. If you destroy the trust (which the banks are quite happily doing, like a suicide that is also killing large numbers of innocent bystanders in slow motion), or physically destroy the network by which the money is moved about (which you appear to advocate), then it is going to be difficult.
      
      There is a difference in between the mathematical accounting and exchange of electronic units (called money), and also the exchange relationship between different governments’ pretty printed paper, also called money but erroneously. Those pretty pieces of printed paper are in fact stores of confidence.
      
      My thesis is perhaps unusual in the UK, where historic confidence in money is high. Perhaps I seem slightly obsessed about it. But you have to understand that I come from a culture – indeed an entire continent – in which millions of people have on multiple occasions seen their life’s wealth and savings wiped out by the effects of confidence being lost, and countries routinely defaulting. I cannot recall precisely the number, but there have been over 50 defaults and devaluations in South America in the last century. That is why physical possession of the bulk of any wealth you have is valued, and money is used for day to day transactions, and not for long term storage.
      
      I do appreciate your remarks are made with some tongue in cheek. I don’t expect to hear on the news tomorrow that the Chester CLP Secretary has been arrested for plotting to destroy the city of London with bombs!
- Dave Postles
  
  The Merkel/King line is (in one case, partly) about moral hazard. It’s a conception of moral hazard that is partial, as your entire comment eloquently indicates.
  - Peter Barnard
    
    Thank you, Dave P.
    
    The shenanigans in financial markets is something that I feel very strongly about.
Dave Osler

Hmmm. You assertion that PASOK is ‘the perennial governing party of postwar Greece’ suggests to me that you are not altogether acquainted with Greek history, Stephen. As for knocking people who have never had a job outside politics, that applies equally to Ed M and a fair chunk of the shadow cabinet.

When writing pieces such as this, is sometimes helps to have some knowledge of what the heck you are talking about.
- http://twitter.com/stephenkb Stephen Bush
  
  I actually wrote ‘a perennial governing party of postwar Greece’, which is true. They’ve been the major social democratic force in post-dictatorial Greece and have made up either the main opposition or the government since the 1977 poll. I’m not, to be frank, convinced that the paragraph about Tsipiras can be taken as ‘knocking’, but whatever floats your boat. Thanks for reading, nonetheless.
  - Brumanuensis
    
    I have to say, Stephen, that the description did read as a dismissal of his ability to serve as Greek PM. You essentially portray him as someone who has never won anything on his own merits (reference to his father’s background; how he acquired the leadership).
    - http://twitter.com/stephenkb Stephen Bush
      
      I mean, he hasn’t, really. His party isn’t particularly well-loved; he was Alexanos’ chosen heir, his appeal as a niche politician was based on his youth in a politics dominated by gerontocrats. The thing is that is equally true both of politicians who have failed (Derby, Cameron) and succeeded (Pitt the Younger, FDR).
      
      I think Tsipiras is much saner – not just in a political sense - than the bulk of the party he leads, but there are huge question-marks over his ability to cut it in real politics.
      - http://twitter.com/stephenkb Stephen Bush
        
        All of those are question-marks, however, which could easily be applied to every Labour leader from Kinnock until Brown, and to a lesser extent to Ed. But I concede that it could be taken as a far more personal attack on Tsipiras than it was meant as. Thanks for reading!
      - Brumanuensis
        
        My pleasure, always enjoy your articles on Progress too. I think it’s a fair point that Tsipiras lacks experience, but as I wrote below, I’m starting to think experience is less of virtue, in our current climate, than it might otherwise be.
  - Attlee
    
    Actually PASOK have traditionally been a nationalist party with social-democratic sympathies than an out and out Socialist/Social Democratic party. Consider them to be more like the SNP or Plaid Cymru in their ideology than the Labour Party or most Socialist International affiliated parties.
    - http://twitter.com/stephenkb Stephen Bush
      
      Cheers for responding. I agree that nationalism is an equal or even stronger component of PASOK than social democracy – at least in an Anglo-Saxon/Northern European sense of the word, but I’d still describe them as ‘the main social democratic force’ in Greece because unlike nat parties with social democratic leanings like the Plaids, SNP or the Bloc, there isn’t another, purer social democratic party.
- Daniel Speight
  
  So Dave, according to your blog you are either there in Athens or maybe just back, and you are member of the Labour Party and a professional reporter, so how about writing something for LabourList. Maybe some true reportage unlike what Stephen wrote whatever he claims his piece is. On the other hand a honest opinion piece would go amiss either.
Sean Cameron

The most important election in history. Not to exaggerate or anything…
http://www.facebook.com/siobhan.omalley.737 Siobhan O’Malley

“The Hellenic model of ‘spend now, pay never’ exploded just as PASOK were taking office.”

Any evidence, or just racism directed against the Greek people?
- http://twitter.com/stephenkb Stephen Bush
  
  Hiya, thanks very much for reading! There is massive tax evasion. Almost no-one pays the correct rate of tax. Tax evasion is rife even in the public sector. And the initial crisis occurred because the government hid its debts off the books. That was how the government operated.
  
  I [personally] agree that it’s wrong that the Greek people are being made to face a terrifying level of austerity, but to claim there wasn’t a distinctively Hellenic economic model that left them horribly exposed to the crash would just be nonsensical.
  - Nathan
    
    If they are not being paid as in many cases for workers in greece then they can hardly pay tax, now can they? If you point to the “historical record” I want hard evidence with references and figures to back this up rather than the typical Progress anecdotes.
    - http://twitter.com/stephenkb Stephen Bush
      
      Hi Nathan,
      
      I think there comes a time when one is just arguing to argue, and I think you’ve reached that here. Once you’re claiming there weren’t problems with tax evasion in Greece prior to the crash, then we might as well just set up the Greek branch of the Taxpayers Alliance and be done with it. Furthermore, I haven’t a clue what a “Progress anecdote’ is or how it differs from a regular anecdote. I’m no more qualified to give a ‘Progress anecdote’ than I am to give an anecdote for any of the other magazines I’ve written for, including that other well-known organ of Blairite neo-liberalism, Tribune.
      - http://www.facebook.com/nathanjm Nathan Joel Morrison
        
        What about tax evasion and avoidance in the banking sector in the UK and amongst the richest in our society? I wasn’t saying that it doesn’t but back up your facts rather than just saying no one in Greece pays the right amount of taxes. I find the suggestion that Greeks by their very nature are tax dodgers. The point i was making is that the massive pay cuts being suffered by public sector workers in Greece has led to a large number having the equivalent wage cuts of not being paid for several months (http://www.guardian.co.uk/business/2012/feb/21/greeks-face-further-wage-cuts-bailout ). Wonder why they’re not paying as much in tax after reading that?
        
        (point about tax evasion in uk see the links on this post)
        http://eoin-clarke.blogspot.co.uk/2011/12/labour-would-not-have-added-single.html
      - http://twitter.com/stephenkb Stephen Bush
        
        What about tax evasion and avoidance in the UK? What relevance does that have? This is a column on European events; this week, the central focus is on Greece.
        
        I mean, yes, there unquestionably was and is a problem with tax evasion and avoidance in the United Kingdom, but I don’t see what that has to do with Greece?
        
        In both cases, yes if there hadn’t been tax evasion and avoidance, then both countries would have had more headroom in terms of meeting costs and dealing with the crisis. That was obviously a problem in both cases. I don’t understand your point here….
Daniel Speight

The real story for Labour Party supporters is not the growth of SYRIZA, but the self-destruction of PASOK. Stephen doesn’t dig too deep and places the blame for this on unlucky circumstances, being in the wrong place at the wrong time. Others, such as myself, would say it was PASOK’s reaction to the circumstances it found itself in that has caused the meltdown and opened the door to SYRIZA.

I think this can be clearly seen when George Papandreou hinted at a referendum to see if the Greek people would accept the austerity condition being imposed, (mainly by the Merkel government), a revolt in the party gave the leadership to Evangelos Venizelos from the right of the party, in fact someone I would guess would fit quite comfortably in Progress.

I will not bother to join the dots to show how this could be Labour’s fate if circumstances were not so bright in 2015 or before.

Now Stephen did I really read below you saying this piece was reportage and not opinion? Ho-ho and it’s not even April the first. The tabloids should hire you talk at Leveson about the division of fact and opinion.
- http://twitter.com/stephenkb Stephen Bush
  
  Hi Daniel, thanks for reading and taking the time to comment.
  
  It is reportage not opinion. I actually agree with you that PASOK played an awful hand incredibly badly, and that, in terms of the tried-and-true ‘What lessons can Labour draw from x’ formula, from what you’ve written, I would probably broadly agree with those areas. I also agree that, depending on how much of a clusterfuck Ed inherits from the Coalition, it’s perfectly easy to see how Labour could go the same way, with infighting, coups and schism leading to extinction (if that is PASOK’s ultimate fate, which I think it probably will be).
  
  Ultimately, all of that – and all of the omissions you criticize - would ultimately drag this piece into opinion. I think that fact that you’ve essentially divined an agenda I don’t hold from this piece says far more about the reader than the author.
jaime taurosangastre candelas

The manifestoes of the Greek parties summarised in English, for those who are interested.

http://ekathimerini.com/4dcgi/_w_articles_wsite1_1_13/06/2012_446676
- aracataca
  
  Thanks for this Jaime. Useful. It’s neck and neck between ND & SYRIZA. Smells like 1932 to me. Expect Europe wide stock market falls and bank runs next week.
Brumanuensis

Senior member of PASOK spikes ND’s guns by declaring that they won’t form a coalition without SYRIZA.

Projected shares are ND 29.5% and SYRIZA 27.1%.
- Brumanuensis
  
  Official projection as of 7.40 UK times:
  
  New Democracy will receive 29.53% of the vote, equivalent to 128 seats.Syriza will receive 27.12% – 72 seats.Pasok will receive 12.2% – 23 seats.Independent Greeks will receive 7.56% – 20 seats.Golden Dawn will receive 6.95% – 18 seats.Democratic Left will receive 6.23% – 17 seats.Greek Communist Party will receive 4.47% – 12 seats.
  
  So ND + PASOK yields 151 seats. Hmm. Enough?
  - Brumanuensis
    
    Correction: should be 33, so 161 seats. Enough?
    - treborc1
      
      Now they have to satisfy the people, did you see the 85 year old gent who was an engineering designer, totally broke, hungry, begging for food from a free food bank, this is Europe for gods sake, we give free food to Africa.
      
      So how long before this new governments call out the troops and will the troops move.
      - http://twitter.com/mistyblulabour dave stone
        
        “85 year old gent who was an engineering designer, totally broke, hungry, begging for food from a free food bank”
        
        Welcome to the reality of austerity.
- Brumanuensis
  
  Live results: http://www.skai.gr/ekloges2012
derek

Another election and another failed attempt, Europe can only start to heal this gaping wound by removing Merkel and Cameron, the stalemate still exists and we’ll return to another election soon as long as Merkel and Cameron remain on the chess- board.It’s looking more likely that Hollande will be the defining factor on whether the Euro should stay or go.
- aracataca
  
  Bring back J M Keynes. Dust him down a bit, give him a new shirt and a snazzy jacket. Endless austerity will finish us all for 20 years.
  - derek
    
    Your going to need more than a ghost from the past? your going to need a declaration and revolution on the monetary system globally.
Dave Postles

It looks like destitution and the soup kitchens have won, then.

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