In the most recent issue of the London Review of Books, John Lanchester lays out the ongoing Greek debt crisis with remarkable clarity and a pleasant willingness to ignore official niceties about who is getting bailed out and why. The very short version of all that is that the most recent infusion of cash to Greece’s creditors is merely a stopgap, and can only postpone the inevitable reckoning about whether or not Germany and the other major Eurozone countries are willing to continue paying for European integration.
Lanchester looks at this through the economic lens of what low interest rates mean for Germany (massive export income) and Greece (bubbles galore). That’s all true, but there’s a similar and equally massive political angle to this as well. The European Union, of which the Euro currency is merely the flashiest component, began as an economic cooperative, but has always had the clearly understood purpose of preventing another European war. Between 1870 and 1945 Germany and France fought three times, the last two of which basically destroyed both countries. Since 1945, and excluding the breakup of Yugoslavia, there hasn’t been another European conflict of note. That six and a half decades is far and away the longest stretch without a major war since . . . what? Charlemagne? Caesar? Ever?
Peace in Europe is an achievement of staggering magnitude, one that we now almost take for granted, but that is nevertheless a very recent phenomenon. It rests on the increasing political and economic integration of the continent, in everything from the lack of internal passport controls to the elimination of trade barriers to all those economic and agricultural subsidies that have flowed from the center of Europe to the periphery as the EU has expanded over the years.
It is in the context of those transfers that the Greek debt default needs to be placed, most especially by politicians and people in Germany and France, the twin pillars of the Eurozone and the hallowed core of post-war Western Europe. Especially after the sometimes contentious ratifications of the Lisbon round of EU reform, European publics are supposed to be tired of hearing from their betters about sacrifices they need to make for European integration, and the reluctance of northern European states to subsidize those slothful Mediterranean ones plays right into that.
However, and this is a big however, you’d be hard pressed to say that Germany, France or any other traditionally prosperous country in Europe has exactly beggared itself over the last twenty years or so. Quite the opposite, the core of Europe has prospered, consistently if not spectacularly. But instead of pointing that out and perhaps laying the blame for this mess at the feet of the incompetent French and German bankers who let things get this far out of hand, the people in charge of Europe are blaming the Greeks, the Portuguese, the Spanish, and just about anyone else that isn’t them. This is bullshit on a rather stunning scale, even when you take into account the less than stellar opinion European peoples sometimes have of one another.
As Lanchester notes:
The Greek people are furious to be told by their deputy prime minister that ‘we ate the money together’; they just don’t agree with that analysis. In the world of money, people are privately outraged by the general unwillingness of electorates to accept the blame for the state they are in. But the general public, it turns out, had very little understanding of the economic mechanisms which were, without their knowing it, ruling their lives. They didn’t vote for the system, and no one explained the system to them, and in any case the rule is that while things are on the way up, no one votes for Cassandra, so no one in public life plays the Cassandra role. Greece has 800,000 civil servants, of whom 150,000 are on course to lose their jobs. The very existence of those jobs may well be a symptom of the three c’s, ‘corruption, cronyism, clientelism’, but that’s not how it feels to the person in the job, who was supposed to do what? Turn down the job offer, in the absence of alternative employment, because it was somehow bad for Greece to have so many public sector workers earning an OK living?
The economics of this are corrupt and stupid, but relatively straightforward. It’s the politics that are poisonous and layered in mutually reinforcing hypocrisy. It’s too simple minded to say that “Europe” is supposed to be “better” than this sort of behavior now. But it’s not too simple to point out that the sense of collective well being that has propelled Europe into its longest period of peace and prosperity ever has been sorely lacking of late.
