Greeks bearing gifts

If you learned Latin at school as I did, chances are you still remember some snippets from the texts you studied as a teenager. Caesar’s Veni, vidi, vici is probably the phrase that comes most readily to mind, but in recent months it is a line from Virgil’s Aeneid that seems particularly relevant to current economic worries. It reads in part, Timeo Danaos et dona ferentis, meaning ‘I fear the Greeks, even when bearing gifts.’ The gift of course was a huge wooden horse the Greeks offered the Trojan people, and we all know how that story ended.

The Greek crisis has been with us since April 2010 when Greece appealed to the IMF, the ECB and the European Commission for a bailout. The distinct possibility that the country’s massive debts might cause it to default, causing disastrous knock-on effects for the euro, market confidence and especially German banks, produced the desired financial package. But there were strings attached in the form of the harshest austerity programme the country had ever known.

Last January’s electoral victory of the anti-austerity party Syriza has meant that this particular Greek tragedy is now being played out on a global stage. The new government’s initial decision to turn its back on the promised bailout package worth more than CAN$300 billion and to dismantle austerity policies won plaudits from left-wing parties around Europe despite dire warnings of impending disaster for the eurozone. Now, suddenly, Greece has pulled back from the brink and come up with a reform plan that has satisfied its creditors, at least for the next four months.

This unexpected gift from Greece comes with the promise of meaningful structural reforms, a crackdown on tax evasion and a commitment to end corruption. Exactly what Europe’s finance ministers had been waiting to hear. Almost too good to be true!

Equo ne credite, Teucri. Do not trust the horse, the Trojans were warned. They should have listened.

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