September 30, 2023 | Rome, Italy


By |2018-03-21T19:06:37+01:00July 5th, 2015|Area 51|
Greece: Too much noise and too much credit.

bout the time the United States began its latest nation-building enterprise in Iraq, the European Union was already busy with its own paraphrased version of Manifest Destiny. With the euro in place, EU leaders cast their net toward Eastern European states, hoping to reel in formerly Communist stragglers in what was an costly if often lucrative project.

Meanwhile, back on the ranch, which is to say the core EU states — Germany and France — spending was the rage. Loans of all kinds went out not only to the east but to Europe’s own stragglers: Ireland, Greece, Portugal, and Spain. If you want to grow, said the EU, borrow, then borrow some more. Booming business would burnish the reputation of the growing Union, giving and clout and growing its currency. Athens staged the 2004 Summer Olympics, covering most of the expenses through borrowed monies that outside investors were eager to give, eyeing interest payments and choosing to believe debtor states would eventually come around to a Teutonic vision of handling money.

At the time, however, the details of repayment mattered less than the wish to invest. The market came first, profits with it. Banks boomed. Bubble markets formed: in Spain with housing; in Italy with bonds, in Greece with infrastructure. EU grants and incentives seemed limitless.

Then came reality. Much as the U.S. discovered that creating an Iraq in its own image wasn’t feasible — indigenous culture wouldn’t permit it — the EU soon discovered its grand southern and eastward expansion could not and would not disguise that money lent could become money lost. The 2008 downturn, which began on Wall Street, brought European fissures. But there were harbingers.

The same year as the Olympics, the Greek budget submitted to the EU to gain entry in 2001 was unmasked as a fraud. In essence, Greece had cooked the books to join the club. But the doctoring was helped along by outside firms, including “creative efforts” from Goldman Sachs. Moreover, EU officials, in full zone-building mode, simply weren’t paying the necessary attention to the mountain of debt their investments were creating, just as the U.S. paid little attention to signs it had done anything but “won” in Iraq. Doubt was inconvenient. EU giddiness — a constant state in the 1990s — made credit card caprices seem manageable.

But pay attention: the Athens audit fraud didn’t stop speculative money from flowing into Greece. It remained an EU state, and an active trader in the Balkans, which the EU was eager to fit into its expanding waistline. From 2004 to 2009, when the hinge finally broke, Greece continued spending, and the EU contributed to it.

Only when the depth of the global recession became clear did EU bureaucrats — led by Germany — begin their pay-us-back drum roll, regularly hectoring the Union’s small fries about corruption and fiscal irresponsibility.

But by then it was too late. Just as it was too late in Iraq five years after an invasion that, while sold as successful, failed in virtually every respect.

Just as the U.S. is complicit in Iraq’s ongoing woes, the EU is responsible for having put claws on the now-broken Mediterranean Frankenstein that is Greece. The EU was determined to phase in new countries according to plans hatched in the mid-1990s. Eager to present itself as a viable post-Communist multi-state, or bloc, it conferred legitimacy where it shouldn’t have. It put flags, stars and spangles ahead of restraint. It did so because it feared restraint would be seen as weakness, particularly a big-spending era dominated, at least in foreign policy terms, by American bluster.

The Greek crisis is not an accident. It’s the metastases of a tumor that began growing 15 years ago, and which the EU both refused to recognize and to treat, hoping instead it could avoid the worst, making do with scolding. If the worst came, then Greece, not the EU, could take the fall — and it is (never mind whether it stays or leaves the club). The so-called “Greek nightmare” is no virgin birth.

But those who insist Greece walked to its own ledge and jumped should take pause. Like an American adolescent, it was given a credit card with a far too ample allowance, little mention made of college tuition. It may have been a well-intentioned, nation-building push but a push is still a push, until it comes to shove.

About the Author:

Christopher P. Winner is a veteran American journalist and essayist who was born in Paris in 1953 and has lived in Europe for more than 30 years.