Europe stands on the brink of a doomsday scenario. If one of its members, Greece in this case, is forced into a disorderly exit from the European currency, the consequences are wholly unpredictable and potentially disastrous for the entire euro project.
Greece is teetering on bankruptcy, that fact is clear to everyone. The country needs money, and fast. Banks have been shut for two weeks, and ATMs have been dispensing minimal amounts every day. With the population growing increasingly resentful of the predatory attitudes of their European “colleagues”, social unrest is all of a sudden not such an unthinkable idea.
The latest bailout offer calls for harsh financial reforms of the Greek system, including pension reforms, tax hikes, and privatisation of large chunks of assets, to be managed by an independent pan-European trust. In other words, Europe are asking the Greeks to hand over the keys to their national piggy bank, and quietly bow down while doing so.
A meeting by the 19 eurozone finance ministers broke off last night without agreement. German Chancellor Angela Merkel, French President Francois Hollande, and European Council President Donald Tusk are due to meet the Greek Prime Minister Alexis Tsipras for private talks.
Mr. Tsipras will be asked to push legislation through over the next 48 hours to prove that he is committed to the reforms requested by European moneylenders, but this will directly conflict with his party’s anti-austerity policies that won them the election.
And further afield, the United States have expressed concerns over the potential geopolitical consequences of Greece exiting the eurozone and become isolated within a region that is already fragile in political terms.