Greece Ruins Everything for Everybody

For those of you just joining the ongoing Greek debt/Euro crisis currently unfolding, here’s the abridged version: For years, Greece employed excessive public spending and unchecked debt growth to a blatantly unsustainable degree. Greek public culture grew around this expectation, to the extent that state dependence on employment and tax evasion were the norm. Then, Greece was one of the countries most hurt by (and most responsible for) the global financial crisis of the last decade. When their mounting debt threatened to kill the Euro, other European powers, particularly Germany, stepped in to set up a bailout plan.

Now between any of those two steps, insert “Thousands of Greeks rioted against proposed austerity measures that might have curbed the debt.” and you’ve got a more accurate summary.

What’s particularly salient right now is the rapid fluctuations of the global market caused by uncertainty over whether or not a bailout deal would actually be reached by the relevant European powers. Last week marked the key summit that finally decided the bailout’s fate, ending months of volatile speculation with a fairly generous deal in which half of Greece’s outstanding debt would be erased.

Somehow, Greek’s financial irresponsibility has given it more (short term) control over global markets than the comparably disciplined French and German giants that support the overwhelming bulk of the Euro’s viability. On Monday, Greek Prime Minister George Papandreou made a surprise announcement that Greece might not even accept the deal, pending a national referendum. After several days of market chaos, he finally made the wise (but politically troublesome) choice to back off this referendum and accept that the much-needed financial help will have to come with strings attached, and that things aren’t going to be happier in Greece any time soon.

I won’t say that the Euro was a doomed currency from its conception, but I will say this: in the wake of a global financial crisis born of fake, dirty money and ridiculous deals, the world at large has become more suspicious of what money really means. That puts the Euro in a bit of an awkward position. Considering it takes a course in economics to even understand why we’re supposed to care about fiat money on the credit of a state, it’s even harder to know why anyone would have faith in what is essentially a printed promise of European unity.

Never has this problem been more evident than with the recent Grecco-Euro bailout talks. The complex fiscal system regulating the Euro is predicated entirely on the different European nations reaching agreements about at least fundamental issues. If Greece really wants to return to the drachma, and chooses to do so, they can unilaterally undermine a huge chunk of the value of Europe’s economy, more so than they have already done.

But whether or not whole European cultures can come to economic consensus is one issue with which the European community has grabbled for decades, if not centuries. What is new now is the extent to which national political actors can bring ruin to a huge international community simply by pursuing their own national political interests. For every time a man like Papandreou makes a disparaging remark or political maneuver about the potential for European unity, the whole of Europe quakes in fear that everyone might realize there’s nothing holding everything together but duct tape and translated promises.

In any case, you will likely not hear much about Mr. George Papandreou in the long term; whether it is because of deeply entrenched financial irresponsibility or simply his own incompetence, his political career is almost certainly damned no matter what he decides to do now.