Blog 2023 Malcolm Blair-Robinson

Beneath the high drama of politics and protest, there are, beneath the surface, currents flowing through the Euro crisis, presently centred on Greece, which give an altered perspective to those who delve.

First, the bail out of Greece is actually a bail out of, mostly European, banks. Many would be in very serious trouble if Greece went into an uncontrolled bust. Therefore when Euro zone finance ministers hold their regular crisis meetings, they are more focused on the survival of their banks than they are the trials of the Greek people. In giving Greece more money, they are buying time for their banks, hoping to put off the inevitable  default until a point down the line when the banks can cope.

Meanwhile the Greek people sense this and have had enough austerity which goes nowhere but to even bigger problems. Even if the Greek parliament passes the package, there is no certainty that the government can put the statute into effect. This is the next layer. Greece is fast becoming ungoveranble by democratic means, but even at its best, it is only partially governable anyway. People do not pay their taxes, especially the better off and there is a mixture of corruption and ministerial rivalry at the heart of government which hobbles the Greek economy, no matter what. Although the symptom of these problems is massive debt, the cause is political.

For the euro zone, although the crisis is indeed financial, the cause is, again, political; the lack of political will to install economic governance across the euro zone to give the euro the foundation needed by any currency the world over, a reliable government. In some ways it may be that a chaotic exit of Greece from the Euro, with vast knock on effects across Europe especially, but also the world, would bring about that necessity more quickly than  a slow write down of the majority of Greek debt, in a dance of the veils called re-structuring. It may also summon the finest qualities of the Greek people to establish a style of government they all respect, whose laws, all of them, they are willing to honour.

This entry was posted on Tuesday, June 28th, 2011 at 11:28 am and is filed under Malcolm Blair Robinson. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.