What happens in Greece will have big implications here

Morning View
Morning View

The crisis in Greece has suddenly gone quiet since the extraordinary events of last month.

For many weeks it seemed as if the country was going to crash out of the euro, and possibly out of the EU, with untold consequences for the rest of the continent and the world economy.

Syriza, the radical governing party, had alienated even European countries sympathetic to its plight with its unreliable and at times reckless negotiating tactics.

The decision to call a referendum on the terms of the creditors over debt and reform and the Greek public’s overwhelming repudiation of those terms seemed to be the final straw.

It is still unclear why Alexis Tsipras, the prime minister, then quickly agreed to terms that were seemingly as onerous as they had ever been. One day we will be told his logic.

It all has implications for Britain and Northern Ireland.

The eurozone will try to move towards fiscal union, which should have preceded monetary union. That means that the UK will be on an increasingly removed outer tier, which then raises questions as to whether it makes sense to be in the EU at all, or whether it is better to reach trade agreements outside of the block. The referendum will decide that.

Meanwhile, if Syriza can claim victory against ‘austerity’, an emboldened Sinn Fein could win enough support in the Republic to enter government, saying that its own spend-spend-spend approach is vindicated. In that case, it is hardly likely ever to agree to cuts in welfare here.

Sinn Fein has, through aggressive tactics, ensured that hundreds of millions of pounds of public money that could be spent on schools, hospitals, roads, defence, agriculture and the environment will instead be pumped into morally indefensible situations, such as families continuing to get more than £26,000 a year in benefits (akin to £34k before tax).

On umpteen levels, what flows from the talks that Greece will reopen with its creditors on Monday impacts on political life here.