Posted on 17 July 2015 with 3 comments from readers
The Greek debt crisis has brought forth some amazingly ill-informed comment from all over the world, particularly from the UK which still sees itself an an island-state basking in the glory of winning the Second World War now some 70 years ago, and also the US where most people fail to understand that the largest economic power in the world is actually the European Union.
Yes folks, the Old Continent’s $18.5 trillion GDP actually surpassed the United States’ $16.7 trillion last year. Nobody ever seems to point this out, so it is not so surprising that hardly anybody knows about this statistical fact.
But of course it makes a huge difference if you really want to understand the dynamics of global power and economics these days. You are ignoring the 500lb gorilla in your front room.
Greece is a member of this club. If you like see Greece as a pet-project of a large corporation that it just cannot let fail, whatever the cost. It’s a matter of political ego as much as economics, though when countries start to give up territory this is often the beginning of the end.
The EU is still expanding with smaller countries joining the euro. But it realizes that this expansion has caused some indigestion, and that brings us to Greece.
Sure Greece should never have joined some 30-odd years ago. They were trouble right from the start. Borrowed too much. Thought they could always talk rather than repay debts. Behaved very badly indeed.
Black-balled not blackmailed
So other club members have finally turned on them. Yes the bailout of four years ago was only done to save the global financial system and not really intended to solve the Greek debt crisis. Yes it made it worse by lending them even more.
But Greece will still get a much better deal now inside the club than outside. In their hearts all the Greeks know this. The idea of them forging an independent future as a dynamic nation with the drachma is a complete and utter nonsense.
The Greeks know themselves that they are a nation of corrupt bureaucrats and unionized labor with a lot of pensioners, not a European tiger nation led by entrepreneurs. Only with a great deal of help will they get back on their feet, and that help can only come from the EU, and as the IMF points out will have to include debt relief – although it will never be called that because the Germans could not admit this.
Personally this has been a drama tinged with nostalgia. I was at Oxford studying and playing politics with the now Greek finance minister Euclid Tsakalotos. I still remember how to spell his name from that time and how he argued around in endless circles as a communist trying and always failing to come to terms with the real world.
I was also an administrative trainee in the European Commission in Brussels so recall the Greek’s early days in the EU only too well. Even then they tested the system to destruction, always having to speak at least twice as long as everybody else and taking advantage of everything going with no thought of the future.
You might think the EU has been a complete disaster for Greece. But go there and you will find a country whose infrastructure has been transformed by EU loans. I remember what a mess it was when I toured Greece with my family before Greece joined the EU and had only just emerged from military dictatorship.
That’s why Greece does not want to leave the euro or the EU. They have got away with so much and gained a great deal. They want to do it again. But after 30 years the EU has more than got their measure and so it will be on different terms this time around. True unemployment is high after five years of austerity, but how much higher would it go as a bankrupt state?
Greece is going nowhere except staying with the euro and the EU. Actually the EU emerges stronger and more united from this crisis than it has been in decades, and once the Greek pill is swallowed the expansion will continue.
My UK readers just don’t get it. The EU is a major success, especially for the eastern countries whose conversion from communism has utterly transformed them. Greece is the bad boy now being brought into line.
Peter Cooper is the editor and publisher of ArabianMoney and a 20-year veteran of Dubai business journalism.