The Greek debt crisis and the country's continued presence in the eurozone long ago exhausted the vocabularies of pundits writing about the seemingly endless last-minute breakthroughs, which in reality have turned out to be breakthroughs merely to the next last-minute breakthrough. The point has surely now been reached where this farce should come to a stop. The endless pantomime of negotiations has allowed an already spectacularly bad situation to become utterly catastrophic. Greek banks are running out of deposits. Greeks are very sensibly withdrawing their euros in the full expectation that at some point soon, these are going to become a foreign currency, replaced by a new and chronically-weak drachma. The European Central Bank is no longer willing to support Greek banks with regular injections of liquidity. The main reason that the banks have not completely lost their deposits is that many of these have been made on a timed basis. In normal circumstances people could still draw these out immediately in return for the payment of a penalty. Now they are being told by most Greek banks that the deposits must run to the end of their term. The latest “breakthrough” in the talks with the rest of the eurozone, in which the left-wing government led by Alexis Tsipras has agreed in principal to fundamental reforms that were accepted by his predecessors but hardly implemented, is almost certainly illusory. Everything now relies on ironing out “technical details” of a series of measures including raised taxes on businesses and the wealthy as well as increases in the VAT consumption tax and larger pension contributions. The elephant in the room is that neither Tsipras' Syriza party nor much of the Greek electorate that swept it to power is going to accept any genuine financial changes to which they remain fundamentally opposed. All the technical discussions in the world are not going to overcome this reality. The Greeks want to seize back the helm of their sinking rust-bucket economy and stay standing on the bridge even as the water laps around their feet. They should, therefore, be left to get on with it. For the sake of the rest of the already-shaky eurozone, Greece needs to be cut free and thrown out of the single currency. The amount of time and effort that German chancellor Angela Merkel has spent struggling to preserve Greece's always flawed presence in the eurozone and tow it away from the reef of default is ridiculous. It is time to cut the hawser and let the Greeks drift onto a disaster that is very largely of their own making. At risk otherwise is the whole eurozone project and by extension the cohesion and indeed continued existence of the European Union itself. From its inception, the eurozone was dubious. It broke its own deficit and debt rules. France only managed to meet the current account deficit obligations by including pensions as state income. Belgium's debt to GDP ratio was double the required 60 percent but it was admitted because the ratio was reducing. Eurozone rules were last week merely tweaked when critics were demanding far tougher tightening. Confidence plays a huge part in the value of a currency and the farcical and endless negotiations with an intransigent and backsliding Greece have already done serious damage to the reputation of the single currency.
