A huge segment of the global discourse has framed the Greek situation
in terms of the EU bullying the poor Greeks with austerity and unreasonable
demands for financial integrity. As far as we know, nobody held a gun to
anyone’s head and forced them to accept low-interest loans from their
neighbours. Ludicrous statements to the effect that the European Central Bank
is preying on the Greeks, and that this is proof positive that the whole Euro
concept is flawed, defy rational consideration.
Plain as day, the reason to borrow is precisely to alleviate perceived
austerity and improve living standards. The method of repayment is derived
from the taxation on the resulting (theoretically) improved business climate
of the debtor nation. If they elect to spend the funds frivolously or
otherwise misallocate the borrowed capital to the point that they can’t even
make interest payments, then it is surely the lender who is being being
abused.
The Guardian’s Zoe Williams opined on June 28th that the Moral Crusade Against Greece
Must be Stopped, and passive aggressively complained that ‘the
strongest takes control’ when ‘what would replace the democratic institutions
– the national governments whose power, once they had no control over their
own currency, would be limited.’
And so what alternative would she propose? That the financial basket cases
take over the accounting?
Detractors of the Euro gleefully proclaim that the Greek predicament is
proof positive that the Euro is a flawed concept with no hope of success. The
first part is obviously correct. Unifying disparate sovereign nations
through a voluntary deprecation of control over their own currency in favour of
a common one is counter-intuitive. However, suggesting that such an endeavour
has no hope of success underscores the ignorance brought to bear in such
arguments of history. The Euro experiment is underway precisely because it is
hoped that it succeeds by all concerned. The resulting strengthened economic
collectiveness in one objective, but more importantly is lasting peace.
Greece has demonstrated a disingenuity toward their participation in the
Euro at nearly every step; from the financial condition of their country upon
joining the Euro, which is now universally perceived to have been
misrepresented by Athens, to Tsipras’ feckless abandonment of talks to
abruptly call for a referendum, Athens has negotiated in decidedly bad faith.
And who, besides, Ms. Williams, fails to understand that all this
brinkmanship and posturing is solely in pursuit of easier terms for Greece?
Perhaps Tsipras’ advisors correctly concluded that their chances of success
were negligible, considering their electoral pledge to end austerity, and
seized upon the face-saving referendum as a way to pre-emptively cultivate
widely distributed blame among the general population and salvage a mandate
to remain in charge after the vote.
Either way, while Greeks appear to rally around Tsipras in a national act
of defiance, history has demonstrated that deadbeat nations suffer an
exponential amplification of austerity when they default. We need look no
further than Argentina for evidence of that. Argentina is essentially the
laughingstock of global finance the world over, and its economy is in a
shambles largely because the Argentinians continue to support corrupt
populist governments such as that of Ms. Ferdinand de Kirchner.
What is deplorable about the Greek situation, however, is the way the
government is heaping the bulk of the austerity upon its elderly pensioners
and otherwise socially disenfranchised. The absence of leadership
demonstrated by the government in failing to curtail its own salaries and
benefits ahead of those of retirees is again evidence of the defective
government in Greece, and the thinking that brought them to this precipice in
the first place.
Austerity, like borrowing, is not a condition to be easily wished or
demanded into or out of existence. It is a mark of civilization that
negotiations and integrity have replaced violence in the developed world as
the way to solve issues. Absolute integrity in financial dealings are the
foundation of that concept, and thus far, Greece has failed to step up.
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