The Next Few Days Have the Potential to Transform Greece and Europe
European leaders in Brussels and Frankfurt and Berlin may not be fair, or democratic, and there’s a good case that the economic policy they are advancing is not very sound. But they hold all the power in this situation, and are leaving Greeks to decide between two bad options.
.. For years Greece has muddled along with a depressed economy and an endless series of bailouts and austerity. It’s fine to play the blame game over how public debt got out of control in the country, but by the time 2010 came around what was done was done, and the human consequences of austerity have been grave.
The Greek government apparently agrees that the definition of insanity is doing the same thing over and over again.
.. Expect the E.C.B. and European institutions to deploy enormous financial firepower to prevent a Greek exit from spilling over to Portugal and Italy and Spain. But saying that this won’t be a Lehman Brothers-style economic catastrophe isn’t the same as saying it would be a good thing.
.. In a true federal system, the government cannot let a state fail, nor can it stop a specific state’s citizens from withdrawing their money from the banks. Germany and its partners are acting like de-facto feds with a gripe, more eager to teach the Greeks a lesson than to heal an already fragile union. Would Berlin let Bavaria or Saxony fail and fall prey to chaos? So why put the banks’ interests ahead of the common good and let Greece collapse? What kind of union is that? Clearly not the type of ‘in sickness and in health.’