Greek tragedy shows perils of consequence-free spending

Morning View
Morning View

Greece is now closer to exiting the single currency than at any time since 2012.

In June of that year, Syriza was a serious contender to win the election, but a right-of-centre government was narrowly elected.

The radical left party, headed by Alexis Tsipras, has since taken office in Athens, with Mr Tsipras as prime minister.

But things have not gone according to plan for the anti-austerity party.

It is said that Syriza wants Greece to stay in the euro but the rest of the eurozone has made clear that this cannot be on Syriza’s terms. It has refused to sign up to a significant package of reforms on matters such as pensions and VAT.

This is a tragedy in which the blame can be spread widely around Europe. The Greeks are culpable for their reckless expenditure, inaccurate accounting, corruption, populist pension provision and woefully inefficient tax collection.

But the EU is to blame for letting Greece join the single currency when it was far from ready to do so. Also, monetary policy was set in a way that suited the needs of countries such as Germany rather than peripheral EU states.

A Grexit, if it happens, will send shockwaves across Europe and will cause immense pain to millions of people in Greece who cannot help themselves. The suffering will be appalling. But consequence-free spending ultimately has to be paid by someone.

It is deeply irresponsible for any governing political party to spend money as if it comes out of a tap, heaping debt on to future generations. It is the policy that Sinn Fein adopts.

Currently public investment in schools, hospitals and infrastructure in Northern Ireland is being cut back so that many millions of pounds of unreformed welfare can be pumped into Sinn Fein strongholds.

Consequence-free spending will come to an end in countries ranging from Greece to Scotland. It is always better when it happens by design, rather than by crisis.