Greece under Sanctions? A Yugoslav Deja Vu . . .


Greece, like Yugoslavia under sanctions, is starting to be cut off from the world economy.  This time, it is not due to war, but rather economics, and, let’s face it, politics.  The debt binge of the first decade of the new millennium was going to require massive belt tightening to pay under any circumstances, just as it has in Ireland, Portugal, now Spain and likely soon others.

The inability of Greece to reform, and even, on May 6, to elect a coherent government has resulted in the market taking the situation into its own hands.  Greeks are taking advantage of the EU’s lack of currency controls to take their money out of the country, by the billions.  Investors are cutting and running.  Those who sell to Greece demand payment up front; commercial insurers, refuse any Greek business.   And just days after the election, Russian Natural Gas behemoth Gazprom warned that the spigot will be turned off if Greece does not pay up.

Effectively Greece is under economic sanctions, dictated not by politics but by the market.  A nation with a huge trade deficit in energy and even food is basically being cut out of world markets.  This harkens back to Yugoslavia in the 1990s, though the Serbs had the advantage—an important one—of being utterly self sufficient in food and had a far, far lower level of economic integration with the rest of the world.  Though they had serious indebtedness (which contributed not a little to Yugoslavia’s demise) their debt and trade deficit was far less than their Greek neighbors have today.  As such, though the politics are different and (thus far) there is no war and violence, the sanctions effect on Greece may be eerily similar.

Of course, Yugoslavia in the 1990s suffered some of the highest inflation in world history, which thus far Greece has not.  True, but whether this element of the Yugoslav equation comes into play is entirely a matter of what happens on the June 17 election.  If Tsipras comes out on top and puts his imbecilic and ill-defined plans into play, Greece will likely be bounced from the Euro and hyperinflation will no doubt begin, complicated by not having a legacy currency already in existence and by the scarcity of vital products (food, medicine, fuel) due to the virtual sanctions on Greece.

Nearly twenty years on, Serbia is still reeling from the twin blows of sanctions and hyperinflation.  The damage to national wealth and, perhaps more importantly, the national psyche, is palpable everywhere.  Greece today is at the threshold of similar pain, and real prudence is necessary to avoid the abyss into which we now stare.  One of the shoes has already dropped, the other is teetering at the edge.

Tsipras must not win.


3 thoughts on “Greece under Sanctions? A Yugoslav Deja Vu . . .

  1. Frankly, as a non Greek resident, I don’t have a real choice in what happens here. But knowing human nature as I do – I think all the rhetoric against Tsipras is going to push people to do the opposite of what you’re recommending. There’s something about being told what to do, even with the best of intentions, that causes people to resist.

    I think Europe would have been better off insisting on the reforms, rather than the reduction of the minimum wage (Greece has never implemented any laws that benefited regular people) and the measures that impacted the private sector. Reducing the public sector was the correct action but it was done by the numbers rather than by determining which people were working and which were simply at work.

    Now that Greece’s economy and safety net are only a memory, do you really expect those who are suffering, with no end in sight to have any sort of national thought at this point in time?

    Even your commentary says that Serbia is still working its way back after 20 years. Voting for New Democracy (which had the opportunity and the will of the people to make necessary changes in 2004, but instead made a bad situation much worse) will not change this.

    It is just too late to do more than watch and see what happens next.

  2. You should be ashamed of yourself! From what you write I assume you are proposing some sort of PAS0K – New Democracy based government. If so, you are supporting the 2 parties who have ruled exclusively since 1974 (post dictatorship) and consequently have absolute and total responsibility for the current situation in Greece. Due to their brand of client politics, inefficiency and corruption, everything in Greece is disintegrating; every section of the economy both public and private. Not only that but the top politicians in these 2 parties have not even had the decency to make a sincere apology and resign, thereby allowing younger/newer candidates without the blemishes of the past to come to the fore. Their personal ambition, or perhaps greed or perhaps fear of accountability, will not allow them to do this. The whole system that they created must be reformed to give Greece, i.e. all of Greek society, any chance whatsoever of building a decent future. They are the fox in the chicken-coop and, learning more than just the sanction threat from other countries, you do not put the same fox back in the same chicken-coop. Also, let’s not hear the usual ”What else can we do?” drivel. There are plenty of suggestions out there and it is only the old PASOK – New Democracy axis that has tried to induce fear amongst Greeks with their ”Us or drachmae” slogan, thereby severely damaging this year’s tourist season by the way. Tsipras and other party leaders have NOT done this.
    Or perhaps you are suggesting one/some of the Communist Party of Greece/Democratic Left/ Independent Greeks/L.A.O.S./New Dawn party/parties, in which case I apologise.

  3. Exohori, I am utterly ashamed of myself, forced to support a pseudopasha like Samaras and fat Venizelos. Frankly, what is the choice? Certainly not the Nazi-Stalinist option you seem to advocate. I hope that Samaras will be a useful idiot to get past the current impasse, at which point he should be consigned to the rubbish heap where he belongs.

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