A Greek Calamity
Is it the first in a line of
It would seem as simple an absolute truth as any you might observe.
What happens to liberty and the pursuit of happiness when one
borrows without conscience and blows the lender’s cash on luxuries?
Creditors come in pursuit. Unfounded prosperity dissolves. One’s
basic financial decisions will likely be made by a court, and
liquidation is an option. Wild borrowing and wasteful spending
absolutely results in ruin.
regarded as the cradle of democracy and of modern civilization, is
in national denial of that fundamental truth. The
member is in urgent need of a financial bailout, having already
exhausted all available credit. Greece is bound by the
to remedies that are detailed in that document and intended to apply
to this sort of circumstance. The nation, it appears, will have its
future dictated by the powers of the pan-European government of the
EU and its central bank.
News of this situation is fairly detailed and not particularly in
dispute, though the story is not yet substantial enough to have
broken into the American public consciousness. The British press
however is carrying big headlines exposing the fact that the Greeks
have forfeited control of their destiny and in fact their
Reaction among the Greek workers, a great portion of which are
dependant on the Greek government for salary or subsidy, reveals a
lack of understanding of how things have changed since the
implementation of the Lisbon treaty.
As the Greek government comes up with budget cuts and a so-called
austerity plan to convince the EU to continue floating their
insolvent economy, strikes are being called across the spectrum of
the nation’s basic services as workers take to the streets
brandishing signs that announce they have no intention of sustaining
the cutbacks the government has in mind for their various
professions. Meanwhile, the central leadership of the EU claims they
are not impressed with Greece’s austerity plans. As far as they are
concerned, the Greeks no longer have anything to say about it.
In fact, Greece will be denied voting privileges in matters of the
EU. Yes, it’s beginning to dawn across Europe and in the
UK, that Greece has in
effect become a wholly owned subsidiary of the European Union,
rather than a participating member. But Greece is not the only
European country to be in deep financial trouble, and subject to
remedies provided by the Lisbon treaty. Greece is but the G in an
acronym derisively spelled PIIGS, pronounced with a short i, for
Spain, that the
financial markets have used to designate this group of nations
facing financial ruin with the implicit potential for a breakdown of
Can the EU afford to rescue Greece through the
European Central Bank? Or might that, as some worry, jeopardize
the EU, the euro, and the whole European experiment? Might the
problem be put to the
International Monetary Fund, where all member nations would be
implicated and have a say? Time is running short for some kind of
solution to prevent Greece from descending into social anarchy.
Extreme fuel shortages are already having a serious effect, and more
major strikes planned for the days ahead may amount to national
It seems the demonstrations are intended to put pressure on the
Greek government to keep the money flowing, but that has become
impossible as the socialist utopia has spent itself into utter
insolvency. Sound familiar?
Several American states and cities are reaching a similar
predicament, where accumulated debt can simply no longer be
serviced. How long will it be before reality sets in on people and
politicians; that government cannot hire everybody, subsidize every
aspect of life, throw vast sums toward politically correct causes
without ruinous consequences?
Some predict that money will flee Europe amid the building crisis,
and flow into dollar denominated assets providing a temporary boost
to the U.S. economy. That remains to be seen, as our federal
government is also on a mindless spending spree that cannot be
repaid for generations to come.
The cover story in the latest
Dangers for the World Economy. It places emphasis on the looming
“threat of sovereign default…”
“Europe’s leaders are struggling to avert the biggest financial
disaster in the euro’s 11-year history.”
The worldwide economic crisis of 2009, we are reminded, was averted
through massive government bailouts. The worst of the economic
problems were simply pushed down the road, and financial bubbles
re-inflated by increased debt. Another factor is the historically
low (in effect zero percent)
interest rates under which the grand sums were borrowed. When
interest rates rise, as they inevitably must, these debts will
become increasingly difficult if not impossible to service.
That’s where we’re headed, economically. Europe is in dire straits
due to the lavish spending of
governments, and the newly reconfigured EU is in trouble barely six
weeks into its existence. By all reports Germany, as Europe’s
strongest economy, is in the driver’s seat. Given historical
precedents, one might wonder how this will turn out for Europe (and
the rest of the world) in the long run.
How far behind can we be here in the U.S., as the same kinds of
socialist policies and programs are integral to current and
long-range planning? Unmanageable debt can crush everything, as is
being cruelly illustrated in the case of Greece.