What does Greece mean for Scotland?

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By Alex Robertson 
 
It is true that Greece and Scotland don’t have much in common apart from sharing a patron saint in St Andrew, and both being in the EU. And the differences are legion, starting with the climate, the cuisine, and the culture.
 
But the weekend vote to find a government for Greece will perhaps have big impacts on Scotland, and indeed on the whole of the EU and far beyond.

At diametrically opposite ends of the geographic EU, the countries are very different, but the whole Eurozone, indeed the European Union, appears to be hanging by a thread on the success or failure of whatever Greek government emerges.

The likelihood now seems to be that the centre-right New Democracy Party, with the largest share of the vote, but far from enough to form a majority government, will form a coalition with PASOK, the socialist party.

Both are more or less prepared to continue with the austerity package, but both are desperate to get their hands on strategies of stimulating growth. That desperate search is not some abstruse academic point of Economics. People, lots of them, have not been paid for months, and whole families are in desperate straits, and there is a very sizeable minority of Greeks who would prefer to dump the Euro and go back to Drachmas.

That would mean devaluation and most likely a default or haircut of Greek debt held all over the world, and across the EU. Spain is looking distinctly sick, ditto Italy, and the markets, already in a highly nervous state, would take it all very badly indeed. And that would impact pensions, bank lending, such as it is, and all of us, Scots included, would feel a freezing wind blast across our economies.

With luck, and a great deal of skill, a new Greek government can steer us all through these treacherous waters, leaving Spain and Italy to be solved by other means. But the chances are that any government will be weak and possibly short lived. The threat of civil unrest is sky-high with people pushed beyond their wits-end how to shelter and feed their family.

The message is clear: austerity alone will not do the job, indeed it will kill the patient before it cures them. The urgent and imperative need now is to put beside the austerity a means of stimulating economic growth.

People must be given a chance to provide for themselves and their children. What seems almost certain is a fundamental reorganisation of the way the EU works, particularly the Eurozone. And whatever we might hope, that too is going to affect us all significantly.

So whatever the outcome, whoever forms a coalition Greek government, however the Spanish and Italian problems are solved, we are all in for a time of immense and fundamental upheaval. And it is a real shame that a Scottish voice will not be heard in all the discussions which will inevitably precede and accompany the turmoil.

That role will be done for us by Westminster ministers, from political parties with little or no mandate in Scotland and imperative calls to attend to the South East and the City. There is a huge stark democratic deficit.

Casting our minds forward a little, to the reorganisation of the Eurozone, it would be silly to think Edinburgh with all its Financial Services sector will not have a view, and it is less than likely that the City-looking Westminster lot will give them or their interests much thought.

Europe is changing shape and form before our very eyes, and Scots have an urgent and very real need to be present round the table when that future is settled.