Greek debt crisis: The melodrama of bankruptcy

MANASI PHADKE

The flavour of this week is distinctly “Gre”. Not Grey. Though that definitely would have to be the colour of this week. Grexit, Greferendum and Greekonomics. Google is flummoxed with the number of searches beginning with “Gre”. The German Chancellor is seriously thinking of changing her name to Grangela Merkel to get voted the most popularly searched Euro Zone leader. The only snag seems to be the Greek PM Alexis Tsipras, who has threatened to copyright all innovative words starting with the letters “Gre”.

This, in short, is the deal. Deny us the bailout and we will see how any Great Gregarious words in this Greedy Greasy world can survive.

This has caused great discomfort to Alan Gre-enspan. Gre-at Britain, which faces the threat of being re-christened Small Britain, has given a statement that its interest is in a stable but flexible Euro Zone. The Germans are thanking the day when they decided to use the Latin (not Greek) root Germanus to call themselves Germans and not Gremans.

In the meanwhile, Tsipras, that wily statesman, is trying every known Greek treek to stay within the EU and win Angela back. When Helen is to be won, sail away from the shore, leaving the Trojan horse behind. One can almost see Tsipras sailing away from the Euro Zone, claiming that the austerity measures have created a “humanitarian” crisis in Greece.

The referendum is his Trojan horse, designed to buy him time. The Achilles heel, unfortunately, is the horrendously high 160 per cent debt ratio that won’t reduce till some drastic austerity measures are implemented.

And if copyrights and Trojan horses are not enough to coax the Germans, he can always get a bit philosophical. He’s a Greek, after all. “Be slow to fall into friendship, but when thou art in, continue firm and constant,” said Socrates. Too bad that Goldman Sachs did not read him carefully while hurrying the Greeks into the Maastricht. They seem to have trusted Pythagoras more. “All things are generated rom number.” Especially EU membership. Eureka!

There is another reason Tsipras is hopeful of staying in the Euro Zone for some more time. The Gre-at Depression phenomenon. At the London School of Economics, young economists were recently informed of the possibilities of the big, bad Gre around the corner. Puts your bad GRE score into perspective, this one. And who gave the young, innocents, this Greu-some piece of news? The RBI Gre-vernor, no less! And this guy really knows his crises. There is this decadal frequency with which he senses it. Further, the consultancy firms have also developed a Rajan geographical crisis indicator scale.

Here’s how. Dr Rajan hinted at the possibility of a crisis in 2005 at a US conference. What happened next? With a two year lag, the crisis hit the US. Now that he has spoken about the Depression in Europe in 2015, it is obvious that the Euro Zone will see a crisis happen only in 2017. For Tsipras, this is good news indeed. This means the bailout and the stalemate can definitely be held off till 2017, till which time, hopefully some other country in the Euro Zone will have bad enough fundamentals to fulfil the Rajan prophecy. The geographical crisis indicator scale suggests that in one decade, the crisis has moved from US to Europe — around 99º to the East of the US.

(The writer is a Pune-based economist)