“…and the will of Zeus was moving toward its end.”
– Homer, The Iliad
Athens’ Burning
The weight of supremacy can ultimately burden a civilization. Success can lead to overreach, and what once appeared as progress may become unsustainable. Just when everything seems stable, a small crack appears, leading to a catastrophic collapse of wealth, military power, and national dignity.
For example, consider Athens. Over 2,400 years ago, it was a beacon of strength among Greek city-states when the Peloponnesian War broke out in 431 BC. Fast forward just 27 years, and Athens lay in ruins, having lost its fierce position.
This war not only marked Athens’s downfall but also extinguished the golden age of Greece. Athens never regained its former glory, with its citizens carrying the deep scars of their shattered identity. Even today, the people of Athens remember this tragic turn of events.
Recently, protests erupted in central Athens, with demonstrators setting buildings ablaze. While their anger appears to stem from austerity measures linked to another bailout, underlying issues may be fueling this rage.
Perhaps it’s the European Union’s overall ineptitude that has ignited their fury.
Living In Default
The Greeks possess a remarkable ability to embrace even the most outlandish ideas. Their early experiments with democracy, oligarchy, and empire have provided a framework for many ambitious nations that followed. In contemporary times, they have uncovered a peculiar resistance to default in the 21st century.
Since gaining independence from the Ottoman Empire in 1832, the Greeks have demonstrated a consistent knack for defaulting on their debts. In fact, Greece has spent almost half of its modern history in default. Politicians rarely enter office without the intent to overpromise and underdeliver.
When overwhelmed by debts, the Greek government has, at times, stiffed creditors or devalued the drachma, starting anew with constrained credit. At Economic Prism, we acknowledge Greece’s complicated relationship with debt. However, we are not in favor of further central bank bailouts for private banks that extended unlimited credit to a government with a clear history of mismanagement.
This approach fosters an environment of economic stagnation. The problematic elements are maintained rather than removed, obstructing growth opportunities for new ventures.
Recently, technocrats convened in Brussels to finalize their latest rescue package for Greece. However, their much-anticipated announcement failed to materialize. The delay left empty promises and uncertainty in its wake.
Without this rescue package, reports AP, “an uncontrolled bankruptcy could force Greece out of the 17-country currency union and back to the drachma, further destabilizing its economy and spreading uncertainty throughout Europe.”
If only the Greeks could catch a break…
The Hell of Technocratic Prevarication
Had Greece not been part of the EU, it could have chosen to default or inflate its currency. Naturally, both options would carry risks, but at least these decisions would lie in the hands of the Greek people and their elected leaders. They could attempt to move forward.
Instead, Greece’s fate now rests with technocrats in Brussels, who frequently gather in self-important assemblies to “solve” Greece’s fiscal dilemmas. Their so-called solutions often involve extending credit in exchange for further austerity measures.
Regrettably, this approach does not resolve the issue; it merely postpones the inevitable and exacerbates the problem. The technocrats celebrate their “success,” only to repeat the cycle time and again.
The average citizen in Athens is likely dissatisfied with the knowledge that their leaders borrowed money beyond what could ever be repaid. However, the real source of frustration is likely the bureaucratic indecision emanating from Brussels.
Thanks to this technocratic leadership, Greece avoids the immediate pain of default or the turmoil of inflation. Instead, it is trapped in a slow-motion, ongoing technical default, characterized by an unending cycle of austerity and rising debt.
This is a unique achievement for EU elites. For those striving to make a living in Greece, it means navigating a lifeless economy indefinitely. To make matters worse, large banks escape responsibility at the European taxpayer’s expense.
Sincerely,
MN Gordon
for Economic Prism
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