Chickens Coming Home to Roost
It's evidently pretty difficult to unwind 3,000 years of European tribalism.
For a while, it looked as if two world wars had done it. The European Union was created, and all those descendants of Gauls, Celts, Huns, Goths and the others swore to live together -amicably. They even agreed to use a -common currency from Finland to, well, Greece.
At present, things are not working out too well. Wars of artillery and airplanes are being replaced by wars of economics.
Just as the Greeks led Europe, and eventually the New World, into what we now call Western civilization, they are presently showing the way to bankruptcy. Greek -profligacy has become the proverbial canary in the coal mine for the -overspending, overtaxed nations of Europe, and, by extension, for us over here in the New World.
Greece is broke. And the European Union, after much arm-twisting and dithering, has cobbled together a -rescue package of 120 billion euros to keep the country afloat. The German Parliament acted tough for a while, but went along with the deal when the International Monetary Fund joined in.
Those darned Huns were being -difficult again because they have the strongest economy in Europe, and they are resentful about helping out the spendthrift Greeks, especially since it will set a precedent for the Portuguese, Italians, Spaniards and Irish, who are likely to follow.
They are not being encouraged by the reaction of the Greek people to the terms of the proposed bailout. The Greeks are being asked to pay more taxes, accept lower public-sector salaries, reduce retirement benefits and take other draconian measures. Their response has been to riot in the streets.
Governments across Europe have made a practice of folding in the face of such public confrontation. But this time they're going to be tough, really. Well, one can hope. Look for those old tribal instincts to resurface as the wealthier EU members try to keep what they have while the poorer, less industrious members flounder economically.
The logical, if not inevitable, -conclusion to all this is the breakup of the European Union, or at least the abandonment of the euro, so that the weak economies can inflate their way out of debt. This will cause all the usual internal chaos, but at least -citizens can keep their nominal -pensions.
Those of us who reside in today's First World countries have had the good fortune to live in the absolute sweet spot of world economic history. The advances of science and -invention, the productivity of our -populations, have allowed representative -governments to suck enough money from the private sector to -provide everything their populations want. Almost.
Now Greece has hit the wall. Greece isn't really a First World country, but the other European tribes took it in and pretended it was. Now they have to pay up to keep -pretending. Look for this to go on for a while, but if those touchy Huns get fed up, or if default looms elsewhere on the continent, expect an ugly denouement.
Meanwhile, world financial markets are in seesaw mode as the crisis in Greece ebbs and flows. Could this bring about the European version of our own 2008 banking crisis? How bad will it get here? You'll have to find someone more qualified than me to explore those questions, but it is clear that panic is in the air.
Meanwhile, the Asian tribes, which have been mostly turned inward since the days of Genghis Kahn, are busy building wealth and loaning it to the West in an ongoing sort of pre-default bailout. They cannot be pleased by all this.
The old saw goes that one should beware Greeks bearing gifts. Perhaps not in this case. The gift the Greeks bear now is a glimpse into a possible, even likely, future.
Fred Wolferman lives in Southern Pines. Contact him by e-mail at firstname.lastname@example.org.
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