A ‘Grexit’ could finally sink the euro – so beware of Greeks bearing threats

THIS is an election year like no other, few can dodge its impact and, whoever wins, most voters will probably feel they’ve lost out.

Because, like a nasty rash, polling fever is erupting almost everywhere and what’s at stake isn’t so much who governs where next, but whether the world plunges into the financial abyss again.

In Britain the only certainty about what will happen in the general election on May 7 is uncertainty, though I have a sneaking suspicion Squire Cameron won’t be handing over the keys to 10 Downing Street.

Why? Because there’ll be what veteran American pollsters wryly recall as the ‘Richard Nixon Gambit’, an event from the annals of politicking gimmickry and the 1960 White House race, squeakily shaded by John F. Kennedy.

Too close to call, the Democrats stooped to a now legendary low in black propaganda by releasing an image of Nixon looking sweaty and shifty behind his grizzled five o’clock shadow, alongside the headline: ‘Would you buy a used car from this man?’

NIXON NIXED: The ad showing a shady Richard Nixon that tipped the 1960 US election JFK's way

NIXON NIXED: The ad showing a shady-looking Richard Nixon that tipped the 1960 US election JFK’s way

The stunt resonated sufficiently for JFK to win literally by a whisker – 49.7% to 49.6% – after voters carried the scary vision of the then Republican Vice President into the polling booths.

Nine years later, and remembering to shave at least twice a day, Tricky Dicky won the presidency – perhaps proving you can’t keep a good crook down – only to resign in 1974 in the murk of the Watergate Scandal.

So, it would surprise me not one iota to see a montage of Ed Miliband snaps, showing the Labour leader at his geekiest worst, cropping up like Comparethemeerket telly ads.

The tacit caption would be: ‘Would you believe this nerd could lead the nation?’

Though Britain’s hustings might be enthralling to dedicated followers of UK politics, they are a parish-pump sideshow to elections globally – and I don’t mean in Burkina Faso, where President Blaise Compaoré is hotly tipped to get the heave-ho in November.

Nor am I referring to Israel’s March vote, which will predictably end in a cobbled-together Left or Right-wing coalition government, neither of which will bow to Palestinian blackmail and have imposed on them a factionalised, corruption-riddled Arab statelet that adamantly refuses to recognise its neighbour’s right to exist.

And forget the polls in Saudi Arabia, Turkey and Egypt, which sully the name of democracy. Ditto Estonia, Finland and Poland, where properly constituted elections should hardly cause a ripple on the Richter scale of political earthquakes.

No, the fun – if that’s not too sardonic a description – is in the European Union’s Club Med nations, beginning next Sunday in Greece, the so-called ‘sick man of Europe’ (well, considerably more bilious compared to the ailing rest).

CAN’T PAY, WON’T PAY: Alex Tsipras (left), head of Greece’s Syriza bloc, demands debt relief to relieve his nation’s plight…or else

Because if a bunch of rebel populists called Syriza, who make the Chinese Communist politbureau look like Young Conservatives, the flaking euro is in for a further buffeting, one which – this time – could actually prelude the first exit of a member state from the Eurozone.

A bloc of far-Left hardliners led by neo-Marxist Che Guevara fan, Alexis Tsipras, the thrust of Syriza’s manifesto is simple: ‘Stop austerity – or we’ll stop paying our debts’, beginning with the instalment of €6.7-billion due to the European Central Bank (ECB) in July.

Unless you’re an International Monetary Fund (IMF) bean-counter, it’s a difficult to gauge just how much Greece owes creditors and what interest it’s cranking up. But terms like ‘colossal’ and ‘humungous’ are understatements and, as one economist noted, ‘At the current rate of pay-down, it’ll 130 years before they return to where they were in 2008.’

How a nation that produced arithmetical geniuses such as Pythagoras, Archimedes and Euclid got itself into such a mega-mess – or managed to flannel its way into the Eurozone in the first place – is no longer the issue.

With unemployment rocketing, the prospect of triple-dip deflation and Greece’s economy screwed to the floor by the ‘Troika’ – that’s the IMF, ECB and European Union, otherwise known as Greater Deutschland – Tsipras is demanding a 50% write-off its debts, just as the international community let Germany get away with in 1953.

For the record, deflation is a mixed blessing. In the UK, where inflation has fallen to 0.5%, courtesy of falling oil, food and commodity prices, consumer spending power is boosted. In contrast, what it means for the Eurozone is rising joblessness, stagnant wages, weak consumption and an inexorable slide into deflation.

POKER FACE: Germany's Merkel fears that a 'Grexit' would be contagious and infect other Club Med states

POKER FACE: But Germany’s Merkel fears that a ‘Grexit’ would be contagious and infect other Club Med states

Meanwhile, despite lame messages from Chancellor Angela Merkel about wanting to keep Greece in the club – which chimes with what Syriza claims it wants – behind the scenes an ultra-high-stakes game of diplomatic poker is being played, with many German politicians refusing to blink first.

‘We are past the days when we still have to rescue Greece,’ insists Michael Fuchs, parliamentary leader of Merkel’s Christian Democrats. “The situation has completely changed from three years ago. Greece is no longer systemically relevant for the euro.’

In fact, it was recently revealed that in 2011 Germany offered Greece a ‘friendly’ return to the drachma, the so-called ‘Grexit’ option. However, Merkel had an attack of the jitters when it became clear Spain and Italy would be mired by contagion from it.

Notwithstanding great strides the Spanish and, to a lesser extent, the Italians have made in putting their houses into better financial shape, with both nations also facing elections in 2015, many voters are looking to see what happens in Athens before they decided which way to jump.

The storm clouds are certainly gathering in Spain, where the Left-wing upstarts of Podemos (‘We Can’), who are allies of Syriza, are currently leading the polls on an anti-corruption, anti-austerity ticket.

Which is why Merkel fears a domino effect across the Club Med if Greece defaults on its IOUs, starts afresh with a new drachma and its economy shows signs of revival.

Because, however tentatively it finds its newly-liberated feet, the Greeks will offer an example to others stretched on the German-imposed financial rack to do likewise.

And the lure of a born-again peseta or lira – plus the freedom of nations to structure their own destiny – might be too strong to resist.

So watch this space…2015 could be the year that reshapes the future of the Eurozone.

 

The credit crisis has changed our lives and – in some ways – for the better

It’s over…the credit crisis, that is. Happy days are here again – and don’t forget you read it here first.

At the risk of sounding off prematurely, apparently green shoots are positively sprouting everywhere, certainly some through the rustic slabs of my patio.

So, surely like you, I’m over the moon after six years of being as sick as a parrot, to borrow the lingo of soccer stars, most of whom never felt the pinch (unless they attracted a nibble from Liverpool’s Luis Suarez).

Six years ago this month boom turned to bust, contradicting spendthrift Gordon Brown’s silly forecast, and a decade of economic prosperity exploded in our smug, naïve faces.

On August 9, 2007, French bank, BNP Paribas, stopped investors withdrawing their money, then Lehman Brothers went belly up and queues of distraught account-holders formed outside Northern Rock in the first ‘bank run’ in Britain for 150 years.

To spare you from post-traumatic shock, I won’t reprise all the grisly details in the aftermath of ‘the day the world changed’ – as one economist dubbed that Meltdown Thursday – except to say businesses collapsed, currencies plummeted, interests were slashed and jobless stats rocketed, especially across the Eurozone.

SOMETHING TO SMILE ABOUT: Mario Draghi, head of the European Central Bank

SOMETHING TO SMILE ABOUT: Mario Draghi, head of the European Central Bank

But, with dynamic, new Bank of England governor, Mark Carney, imported from Canada to wave a financial magic wand over the GB£ and a Mona Lisa smile creasing the stony countenance of Mario Draghi, the European Central Bank chief, at last the runes seem optimistic.

Still, as the economic data improves, how come I don’t hear bubbly bottles being popped, see bunting festooning streets or listen to the lilt of relieved banter in my local hostelry?

Save the well-shod few, the harsh fact is it still may take years for the ‘trickle-down’ effect to impact on most of us and some of the hardest hit will be doomed to live in penury for decades to come.

And even when (and if) The Crisis eventually fades, life will never be the same, because we’ve learned the lessons of whooping it up in a false utopia and only mugs will make those mistakes again.

We’ve become cannier now, cynical and less believing of our political leaders, not least the banking masters of the universe (a.k.a. robber barons). Most of all we’ve adjusted our lifestyles to cope with the realities of austerity and actually take no small measure of pride in how we well have adapted.

So how have we achieved that?

A snapshot survey of opinions in my neighbourhood is telling…

The weekly shop is done with greater price awareness, luxuries we once lavished on ourselves are rarer and the supermarkets we now patronise aren’t the upmarket emporiums they once were, but rather discount outlets (evidence: see Aldi’s stock-market price and its phenomenal turnover of cheap, quality vinos).

Motor trips, too, are under regular scrutiny – an echo of the old, wartime dictum: ‘Is Your Journey Really Necessary?’ – which signals double delight for the Greens, as fewer noxious gases are emitted and bicycling has flourished.

In other, diverse sectors vacations have morphed into ‘staycations’ and the divorce rate has dropped (by 23% in the UK), because separation is too expensive, thus proving the point that if loves doesn’t conquer all, a financial reality check can.

Plus, there have been some intriguing, if bizarre unintended consequences, as cash-strapped folk invent ways of saving.

A boom in home cooking has seen an upsurge of more exotic fare being tried – when we do eat out, incidentally, puddings are generally off the menu – and sales of racy lingerie are rising (work that one out for yourself, except to hint that man cannot live by telly alone).

Tupperware is now an office-worker’s must-have, since sarnies have replaced the executive lunch, while fruit-platters in boardrooms and free biscuits in meetings have bitten the dust, as have expensive potted plants and leased artwork.

Moving house went out of fashion, DIY came in – even my son (the one who once couldn’t replace a blown fuse in a plug) has installed himself a new shower to minimise the cost of power and the water it takes to soak in a hot bath.

FALLEN ON HARD TIMES: Even hookers are having to cut their charges

HARD TIMES: Even hookers have had to cut their charges

And pity the hard-up ‘ladies of the night’, who’ve had to pare their tariffs by as much as 50% to lure a punter into their boudoirs, according to a report by London’s Westminster Council, which reflects a Europe-wide trend.

So certainly a degree of Puritanism has entered our mindset, if not for religious motives.

However, there are the inevitable downsides…dental hygiene has suffered, because patients fear being landed with astronomic bills, though that’s partially offset by us eschewing the delights of the dessert trolley.

And we can’t get rid of our offspring. Property prices are still ridiculously high compared to earnings, so it’s not unusual for a 35-year-old to still be domiciled with disgruntled parents, who now query the wisdom of having kids in the first place.

In contrast, there is ‘housing consolidation’ – the terminology for converting the loft into a granny pad, flogging their bungalow to offset rising living costs and forestalling the distinct probability it will only get frittered away on expensive care-home fees at some future date.

Pets, too, are feeling the credit crunch, with some owners letting the cat out of the flap, then nailing it up or taking Fido on a one-way trip to the middle of nowhere. Britain’s RSPCA, for example, reports a 65% increase in the number of moggies and pooches being dumped since 2007.

Whatever else, the upshot is most of us have learned to be leaner and meaner, infinitely more discriminating in how, when and why we spend our moolah.

And that make-do-and-mend mentality isn’t going to change, even if the promise of some measure of economic stability is just around the proverbial corner.

Whether it is or not remains to be seen. But if it does, don’t forget who told you first.