Only the drachma can put Hellenic Tiger out of its misery

HUBRIS is a Greek word, which lends a satisfying congruency to the implosion of Eurofanatic ambitions originating in the land of the classical tragedians. Sir Mervyn King, Governor of the Bank of England, has confirmed that the Bank is drawing up contingency plans to deal with a debt default by Greece, though the precise nature of those precautions remains unknown.

It is now a much-aired consensus among City beard-waggers and politicians that stress tests on Eurozone banks were not sufficiently rigorous and that some remain seriously undercapitalised. As one anonymous government official recently expressed it: “The Irish banks passed the first stress tests, so you can see why we are worried.” King has told the House of Commons Treasury Select Committee the financial markets estimate the risk of a Greek default at 80 per cent. That sounds like deluded optimism: 100 per cent would be nearer the mark.

The Governor has also stated that the Eurozone crisis represents the greatest single risk to the financial stability of the United Kingdom – which is not even a member. That is what happens when the 20th/21st-century successors to Voltaire and Rousseau are allowed to impose their febrile dreams upon 500 million people. The true crisis is not of the European currency but of the European Union. The country whose banks have the worst direct exposure to Greek insolvency is France; in contrast, British banks’ exposure is only 3 per cent of their core tier capital. Yet that affords little protection in this game of dominoes, when their exposure to the French and German banks is huge.

So, Britain is at risk of serious financial problems – on top of those resulting from the earlier banking crisis – even though this country has not joined the Eurozone (the one consummate folly that the Labour government did not commit). This crisis does not result from inadequate stress tests on Eurozone banks, but from the farcical manipulation of the original stress tests for nations applying to join the euro – the derisory “Maastricht criteria”. There were, at most, half a dozen countries that could meet the criteria; but the Brussels-based Fourth Reich had ambitions to conquer many more nations than that, so Greece, Italy, Spain, Portugal and Ireland were made founder members of a club whose subscription they could not afford.

Greece’s claims to membership included endemic political corruption, pandemic tax evasion and a government whose collective talents did not qualify it to run a corner sweetie shop. Call it the Hellenic Tiger. So far, it has devoured ¤53 billion euros of the first ¤110bn bailout; but its debt will amount to ¤350bn by the end of this year.

Throwing European taxpayers’ money, including British taxpayers’, courtesy of the IMF, into this black hole is insanity. It is being done for a political, not an economic, purpose: to prevent Greece leaving the Eurozone, returning to the drachma, devaluing and repairing its economy in the style of Argentina.

The Brussels oligarchs, in defending their empire, are prepared to ruin not only every country in Europe but also the global financial system, which US Federal Reserve chief Ben Bernanke has warned is now threatened by the Eurozone crisis.

In the infatuated defence of a European pseudo-currency which was never a genuine financial entity but the totemic emblem of political fealty to the EU, the Brussels Bunker is prepared to destabilise the whole world. The euro is jaded postmodernism expressed as a politically correct currency. It is doomed to succumb to reality. The sooner it falls, the less serious the catastrophe will be. The German economist Hans-Werner Sinn has claimed that the “internal devaluation” being imposed on Greece could provoke civil war in that country. The EU spin is that lazy Stavros lived beyond his means and is now paying the price. Who invited him to do so but the Maastricht illusionists? Demonisation of the Greeks comes implausibly from the cartel that debauched them in the first place and which is now moving heaven and earth to prevent their taking the correct remedial action. Penal deflation is not the answer; exit from the euro, return to the drachma and devaluation is.

Commentators have compared such a move to the supposed disasters that Britain has suffered in the past, including being forced off the Gold Standard in 1931 and out of the ERM in 1992, both of which proved highly beneficial. If Greece is kept in a straitjacket of spiralling indebtedness the whole system will eventually collapse. The real need is not just for Greece to exit the euro but for Britain to leave the EU and for that Heath-Robinson contraption to fall apart. Otherwise, there is no limit to the damage the plague bacillus of Euro-integrationism may wreak upon the entire world.