Greece: a tragedy in the making

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This has been a grim weekend for news. No one can have failed to be moved by what has happened in Tunisia and France. Elsewhere in the world conflict brings more victims, but it is Greece that concerns me here although at this moment the immediate human cost seems less apparent.

I don't think that will last for long. Greece has imposed capital controls in the last hour before wrote this. The sign has been given that Greece is now a country that sought the proffered support of allies, who then abandoned it. That sign says that the democratic choice of people's and nations does not matter: it was a banker who delivered the blow. And just as in 2008, when Lehman fell, no one really knows what will happen now that the European Central Bank has declared Greek banks, en bloc, to be insolvent.

On the ground, in Greece, there will be desperation. Money is not, of course, everything in life. But try to do without it as the mechanism that makes the modern economy possible and then see what happens. That is the experiment that the ECB has unleashed tonight. No one can be sure what the outcome will be. We can sure there is no upside.

And elsewhere there will be contagion. It is impossible that it can be avoided. There will be counter-parties to Greek banks in other countries who will lose as a result of what is happening. No one yet knows who they are. Across Europe there will be many who could be about to lose as a result of what has been decided who have no idea of what is going to happen: that's the nature of bank collapses.

All of which is unnecessary. Greece made mistakes in its economy, for sure. As a result it has paid an incredible price in the destruction of physical, human and monetary capital over the past five years. It cannot be expected to bear more. The Greek government has been right to say that the time to say enough has arrived. It was time for the EU, IMF and ECB to say debt write down had to be on the agenda. But austerity and more misery for the people of Greece has been instead. It is as if the lessons of 1919 had never been learned, most especially by the Germans.

Recriminations, referenda, and offers can come now but the point where the damage might have become irreparable may have already been reached. Can anyone trust their supposed partners again when they make clear that in an hour of need the answer to the question will be no? Because that is what has been said today.

In that context the argument about ever closer union is meaningless.

And the argument about monetary union is just nonsense.

There is just power. Ugly, brutal, financial power apparently exercise by homo economicus without compassion, as the breed demands.

And when faced with that no one can be sure how homo sapiens will respond.

That's what worries me: this is a tragedy in the making.