Another month, another loan. That’s a decent summation of the ongoing crisis in Greece and the “Eurozone,” and it might almost be cute if it weren’t so close to the more complex truth, which isn’t, in fact, much more complicated at all: Greece is collapsing, and its continental brethren, like so many deer in the headlights, seem powerless to force the country to do anything that resembles a sensible and comprehensive solution.
Just recently, two French banks were downgraded by Moody’s Investors Service, a credit agency, because of their exposure to Greek debt. Other banks in France and Germany, continental Europe’s strongest economies, may soon face the same fate. This will only drop another political pylon onto the road towards a proper solution, making it more difficult than ever for leaders in both countries to justify hard choices to their own constituents.
And that could be disastrous. The only reason the Eurozone’s collective debt is lower than that of the United States is because of the strength of the northern economies, and without their support, a myriad of possible fixes become untenable.
The proposed jointly issued “eurobonds” will be difficult to work without support from Germany, where the idea is currently blowing gaskets left, right and centre. In the long-term, a more centralized currency regime will be essential to the euro’s survival, and this will only work if all the players remain in the game. France may be one of the biggest supporters of a single currency, but it’s also big enough to decouple from it without missing a beat.
And then there’s Greece itself. The government has acknowledged the difficult task ahead of it, and it seems as though the opposition has done so as well, to some extent, but the problems there run deeper than mere politics.
This past summer I was fortunate enough to travel to Greece, and while there I witnessed a remarkable spectacle. During a dinner in Athens, my travelling companions and I noticed a growing ruckus just down the street. Within a moment, we saw a man — apparently a Greek politician — striding through the market, accompanied by two bodyguards, being followed, it seemed, by everyone who had a moment before been dining around us. People stood up at their tables or leaned out of windows and yelled, swore and even threw food at him. If there was any doubt in my mind, that image settled it — the people of Greece are furious.
But at what? Their politicians, who bled the country dry, aren’t the only ones to blame. Prior to the crisis, Greeks enjoyed one of the continent’s lowest retirement ages, some of its best pensions and one of the most pathetically ineffective tax regimes in the developed world. The people of Greece — those same people who angrily abandoned their dinners and followed that hated politician — wanted in on the luxuries of the modern world but weren’t willing to work for them, and the governments they elected simply delivered the only way they could: borrowing massive amounts of money to prop themselves up.
If Greece is to survive this crisis, then it must not only win the continued support of Europe’s biggest economies, but also re-evaluate its own way of life, its culture. Such a difficult task will only seem daunting until the other possibility is entertained — a country that may well collapse completely. If that happens, there’s no telling how much worse life in Athens could still get.
Greg Sacks is a second-year law student at the U of M.