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Is the Greek referendum just Yanis vs. Jeroen?

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July 6, 2015 Comments (0) Views: 2782 Homepage

Angela Merkel’s April Glaspie moment

As ill-fated meetings and misunderstandings go, it’s hard to beat the one on 25th July 1990 between US Ambassador to Iraq April Glaspie and Saddam Hussein. With Iraqi troops already massed on the Iraq-Kuwait border, you might have thought that the US ambassador would have some stiff words and a warning or two as regards the potential consequences of an aggressive further move by Iraq. But when the time came to pass comment, the Ambassador merely stated that “We [the US] have no opinion on Arab-Arab conflicts”. A week later, convinced by what he had heard that a move against Kuwait would not be physically opposed by the US, Iraqi forces invaded and over-ran Kuwait, setting in train a series of events that culminated six months later in the first Iraq War (it wasn’t the last one, either). For April Glaspie, at least, it was to be her last overseas posting.

Ten days ago, German Chancellor Angela Merkel appears to have made a similar mistake with respect to Greece when, on Day one of the regularly-scheduled EU Council meeting being held in Brussels, she indicated that the outstanding Greece-related issues needed to be settled not at the political level among herself, French President Hollande and Greek Prime Minister Alexis Tsipras, but one notch down the seniority food chain instead, at the Finance Minister level. Deflated at his inability to communicate with Chancellor Merkel in the sparse time available before the end of the month and the expiry of Greece’s bail-out programme, the new (and young) Greek Prime Minister appears to have panicked, and decided he had no choice but to call a referendum on the best package he had available to him at the time. Ever since then, the Euro zone has been in a state of chaos, with every passing day worse than the previous one. In the wake of Sunday’s No vote in Greece, tempers all round hit new lows today.

However, Chancellor Merkel and President Hollande are due to meet one-on-one this evening, in Paris, and then again tomorrow with the rest of their Euro area Heads of Government, at another hastily arranged informal Euro Summit. Markets will be watching and waiting for a ‘Whatever it takes’ moment. If ever the Euro zone needed political leadership, it is now. I think they will get it, just. But I wish I was more confident about it, given the risks.

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