Seventeen random neighbours are roped together and sent up an unclimbed, unmapped mountain. One happens to be an Olympic athlete; one is a couch potato. The risk assessment goes like this. Someone says to the couch potato: “You’re fit enough for this, aren’t you?” “Oh yes,” replies the couch potato. Someone says to the Olympic athlete: “You’ll ease off a bit, won’t you?” “Oh yes,” replies the Olympic athlete.
And that’s it. Off they go. It’s going to end very badly.
The euro was no less an act of madness: roping together 17 nations because they happened to be neighbours, ignoring the fact that some are superfit and some are slouches, and sending them down a policy route that no one had ever taken before.
Now, with our 17 climbers strung out across a dangerous uncharted mountain slope, Greece is dangling over the precipice. The debate among the 16 others is whether to cut the rope and let it plunge. The cry goes down: “We’ll haul you back in but you’ll have to cut off all your gear. You’ll have to continue up the mountain with no equipment.” What a choice. Talk about a rock and a hard place – how appropriate for a nation that gave us Scylla and Charybdis in the first place. And no wonder the Greeks can’t choose between the precipice and the naked climb.
The others near the back are also twitchy. If Greece is cut free, will the other strugglers lose their footing and follow them over the precipice? Suddenly no one feels that secure.
At the front, meanwhile, the superfit Germans are still straining forward at the leash, offering the dangling Greeks a snack bar if they agree to take all their gear off. “It’s a perfectly good offer,” says Germany, reaching into a rucksack full of food. “The snack bar is yours if only you agree to chuck all you have into the precipice.”
The point is that the besuited visionaries who came up with the expedition idea may have never really considered how badly wrong it could go. The readiness to accept Greece’s assurances of fitness for the journey (those now infamous cooked books), the readiness to rope together 17 such disparate nations, the readiness to send them into uncharted territory in the name of a vision: with hindsight it was folly.
Yes there were rules made, but to start with it was the frontrunners themselves who broke them. The requirement to stick to an annual budget deficit within 3% of GDP was breached first by the bigger economies. No wonder the other states were led astray.
It’s easy to be wise about how we got into this mess, it’s harder to see how the climbers are going to get off the mountain alive. In climbing, there’s an often fatal condition called “mountain madness”, (NB absolutely nothing to do with the firm of the same name!) where the desire to get to the top drowns out all wisdom about whether it’s safe to do so. It seems that the euro leaders are suffering from their own mountain madness: the vision drives them on, blindly, onwards and upwards, and the Devil take the hindmost. (That’s enough mixed metaphors: Ed)
Greece, dangling over the precipice, seems as stuffed as a kalamata olive whatever happens now. Ireland, Spain and Portugal are near the back too, slithering around dangerously near the edge. I have no idea what the answer is, but the German rucksack still looks pretty full from here.
In another terrifying detail in the whole mountainside drama, Spain has found something very nasty lurking in its own rucksack. The wobbling and imaginatively named bank Bankia has had another look at last year’s accounts and realised that instead of making a 300m euro profit, it made a 3bn euro loss. That’s some accounting error. The bank now wants a modest 19bn euros, presumably to pay for better accountants. For Spain’s chances on the mountainside, it’s the equivalent of discovering that your rucksack is packed with lead.
And if Spain’s fourth-largest bank can belatedly spot a 3bn-euro loss, who knows what other huge and hidden losses might be lurking out there?
Ireland is now voting in a referendum on the EU’s tough new fiscal treaty, but the outcome either way won’t block the treaty – which doesn’t need the agreement of all member states – and certainly won’t solve the crisis.
Two years from now, it’s anyone’s guess who’ll still be on the mountain and who’ll be lying crumpled at the bottom of the precipice. Maybe the entire roped-together expedition will have slid one-by-one over the edge, dragged down by each other’s weight. Experts have predicted everything from civil unrest to waves of migrants to an orderly return to separate currencies. The old saying that if you have three economists in a room then you have at least four theories has never been truer.
If we learn one thing from this whole nightmare, it’s that the expedition organisers need to very sure of their facts before putting their vision to the test on millions of people.