August 28, 2018

It was a case of mistaken identity.

I’d glanced briefly at my Twitter timeline and registered the words ‘Donald’ and ‘President’.

‘What’s he said now?’, I wondered to myself.

It turned out to be an insensitive comment about another country, so no surprise there. Except that it was about Greece and the end of its bail-out programme – not an obviously Trumpian topic of interest.

But, of course, I’d got the wrong Donald. On closer inspection it turned out to be D. Tusk, President of the European Council, not D. Trump, President of the United States of America.

If you missed it, here’s the tweet in all it’s sick-making glory:

“You did it! Congratulations to Greece and its people on ending the programme of financial assistance. With huge efforts and European solidarity you seized the day.”

It’s amazing how much misjudgment you can pack into 26 words. But the tweet is just as remarkable for what it doesn’t say.

For instance, it doesn’t say that over a fifth of Greeks are living in severe material deprivation (and over a quarter of Greek children). Nor does it acknowledge the unemployment rate of around 20% or the youth unemployment rate of almost twice that. There’s no mention that nearly half-a-million Greeks have left their homeland; no mention that the crisis has wiped out a fifth of the Greek economy; or that productivity and investment have cratered; or that the country remains weighed down by extraordinarily high levels of sovereign debt and nonperforming loans. (A horrifying OECD report has the grim details).

All that and more is the context for Tusk’s cheery “You did it!” – as if it were 2004 again and the Greek football team had just won the Euros.

The fact that Greece has returned to growth, that the government is running a primary surplus and that the bail-out programme has stopped is, of course, to be welcomed – but not as a distraction from the fact that the damage done to the Greek economy is extreme and permanent and, above all, ongoing.

It’s a point powerfully made by Frances Coppola in an article for Forbes:

“The magnitude of Greece’s collapse over the last decade is extraordinary… The Greek people have just lived through a Depression as deep as the Great Depression and considerably longer. It is now the greatest recorded peacetime Depression.”

“…Many of Greece’s young people will be middle-aged by the time there is any work for them. Some may never work at all. An entire generation thrown on the scrap heap.”

The bail-out programme may be at an end, but Eurozone control of Greek economic policy certainly isn’t:

“Greece’s government is critically hampered by ridiculously tight fiscal targets not of its own making. The Eurozone creditors have agreed a package of debt relief that depends on the Greek government maintaining high primary fiscal surpluses virtually indefinitely.”

Coppola quotes the Euro group itself as saying that the terms forced upon Greece imply that it must run a “primary surplus of 2.2% of GDP on average in the period from 2023 to 2060.”

You don’t have to be a hardline Keynesian to realise this amounts to a policy of permanent austerity in all circumstances.

Coppola wonders what will happen the next time that the Eurozone heads for recession. And that’s not the only trouble brewing:

“Greece is currently paying very low interest rates on its debt. But when the bonds held by its Eurozone creditors mature, it will have to refinance them on the financial markets – if it can. It’s as yet unclear how much market access Greece will have by, say, 2030.”

There are many things wrong with the Tusk tweet: The celebratory tone, the shameless reference to “European solidarity”, the absence of the merest hint of an apology to the Greek people. But the cruellest thing is the impression it gives that the pain is over.