AVERAGE CITIZENS CAN BE FORGIVEN for a general confusion and alarm emerging from the Greek debt crisis. The sheer financial numbers, opinions, and economic layers are dizzying. For every economic theory coming from established experts comes another established opinion stating exactly the opposite coming from others.
Let’s put the various viewpoints aside for a brief moment, if indeed we can, and consider the trends emerging from the crisis.
First, it’s not really the Greek currency that’s back of all these difficulties but the euro itself. Across the vast networks of the EU the rips appearing because of the competing policies from individual member nations are increasing and troubling. Britain particularly appears on a collision course with the EU framework, especially now that British PM David Cameron is just coming off a convincing win in the recent election. Yes, today it’s Greece, but tomorrow the crisis could shift in numerous directions across the old continent. Ambrose Evan-Pritchard, international business editor of the Daily Telegraph, was forced to conclude as a result of yesterday’s vote: “Leaders of the Eurozone have learned nothing, and forgotten nothing” – a conclusion that confounds us even further.
Second, the recent financial compromise reached in the last few hours in many ways is as infuriating and harsh as the earlier arrangements that led to the Greek revolt in the first place. According to recent economic reports, the new deal creates levels of austerity more severe than its previous counterparts. Following 31 hours of grueling torture, the EU got its questionable deal, but for Greece, as Evans-Pritchard adds, “the terms are harsher by a full order of magnitude than those rejected by Greek voters in a landslide referendum a week ago, and therefore can never command democratic assent.”
And herein lies the deeper problem. For almost two centuries it appeared as though democracy and finance walked a similar path, albeit with frequent tensions. The world’s managers – financial, corporate, and political – are still attempting to hold to the line they believe necessary for future prosperity. Citizens, however, now harbour increasing doubts as to whether the global financial system acts in concert with the ideals of democracy itself.
This dislocation grows every day and in every financial quarter. Greece’s leaders can’t just expect the EU to bail them out every time and then pretend as though their debt doesn’t matter – they at times borrowed irresponsibly. Yet the EU is also realizing that soon enough what took place among the citizens of Greece will surely happen again, and perhaps spread across the continent – partly due to irresponsible lending. Though President Obama supports the outcomes of this week, it was only a few months ago that he observed, “You can’t keep squeezing countries, like Greece, that are in the middle of depression.” That is exactly how the Greeks feel, and whether people agree with it or not, it is a sentiment creeping into other nations.
Spain and Portugal are about to head into national elections, with the present governments enacting heavy austerity measures for dealing with debt while arousing increasing anger among voters at the same time. France and Italy will go to the polls at a later time, but the opposition to austerity measures has found significant support in those countries, with the developments in Greece surely not far from their minds.
In real terms, Greece’s problem has become our dilemma. How else to explain the surging popularity of Bernie Sanders south of the border? That he was popular was no surprise, but that he could raise millions of dollars and pick up as much momentum among Americans as he has must surely signal that democracy is increasingly at odds with the global financial practice of austerity.
Regardless of our opinions on the Greek crisis, we must all become more concerned over the growing gap between democracy and economic viability, as much as the expanding chasm between the rich and the poor. New York Times writer and economist, Paul Krugman, noted a few years ago that, “For most Americans, economic growth is a spectator sport.” As the signs from Greece and the rise of the anti-austerity movement are revealing, citizens are now pouring out of the stands and onto the field. This is going to be a melee of significant proportions, and only adroit leadership, and economies heavily seasoned with humanity, will find their way through this next difficult phase. Regardless of which side you are on, or even if, like most of us, you just remain muddled, it’s in everyone’s interest that a global consensus be achieved.