Download greek tragedy current allusions

Crushing debt a Greek tragedy
Rebuilding country’s economy while preventing the pain from spreading through the EU will require a
herculean effort
By Eric Margolis, QMI Agency
Last Updated: February 21, 2010 2:00am

NEW YORK — The fifth labour of the mythological Greek hero Hercules was cleaning 30 years of
accumulated manure from the Augean stables. He did so by diverting two rivers, then went on to found
the Olympics.
Today, Greece’s finances are another Augean stable. They risk igniting a financial crisis almost as
dangerous as Lehman Brothers’ collapse in 2008.
Greece’s new socialist Prime Minister George Papandreou, will need Hercules’ strength and wits to
restore Greece’s economy and prevent its crisis from infecting other members of the European Union.
Greece is rich by people, but poor by government. Greeks are a very smart, tough, fiercely hardworking people. When Greeks settle abroad, they excel.
But at home, in the cradle of democracy, Greeks have long been cursed by corrupt governments,
political tribal warfare, mutual suspicion and disreputable finances. The same holds for some Balkan
nations and, until recently, Ireland.
Many Europeans felt Greece should never have been admitted to the EU or, later, the euro zone.
Bulgaria, Romania and the Greek portion of Cyprus were similarly unready. It turns out that Greece
met the EU’s financial admission standards by falsifying its books.
Greece’s alternating conservative and socialist governments were both responsible for its third-world
finances. A third of Greek workers are employed by government. Truculent public sector unions
threaten paralyzing strikes and riots if they don’t get fully paid retirement at 61-63 years, generous
wages and long vacations.
Ludicrously, half of Greek taxpayers declare income under 12,000 euros (about $17,100 Cdn) and pay
no tax. Greek business is adept at evading taxes. Corruption runs rampant.
Like U.S. President Barack Obama, PM Papandreou inherited a monstrous financial mess from the
previous conservative government. These Pirates of the Aegean claimed Greece’s deficit was only
3.7% of GDP, thus in line with EU regulations.
The figures were fraudulent. Greece’s real budget deficit was at least 12.7%. Athens owes billions in
loans it can’t repay.
We also learn with revulsion that Goldman Sachs (for full disclosure, I’m a former client) reportedly
helped Greece hide its debts through opaque financial derivatives. So not only did Wall Street cause the
current financial crisis, New York’s money lenders also exported their malign alchemy around the
globe.
Europe’s weak financial sisters — Portugal, Italy, Ireland and Spain (known by the ugly acronym,
PIIGS) — risk infection from Greece’s crisis. Their debts are far too high and financial reporting
deeply unreliable. Britain, another major financial malefactor, also faces its own looming day of
reckoning.
Meanwhile, Papandreou has had the hubris (a good Greek word meaning pride/chutzpah) to demand
the EU pay Athens’ debts.
Greek gods destroy those with hubris.
EU bigwigs Germany and France will have to rescue Greece. But their voters are as outraged as
Americans by growing government debts.
Polls show 70% of thrifty Germans and many French oppose rescuing the profligate Greeks.
Chancellor Angela Merkel rightly asked why Germans, who must work until 67 before retiring, should
bail out Greek workers so they can retire at 61.
Russia’s PM Vladimir Putin just cuttingly observed with a twinkle in his ice cold eyes that America is
no better than Greece at handling its financial mess. In both cases, supposedly conservative
governments permitted massive financial fraud and left an Augean stable of debt.
Putin’s comment is interesting. Russia has the world’s fourth largest monetary reserves. Moscow could
conceivably rescue Greece, thus renewing its influence in the Balkans. That would be a real strategic
coup.
In the end, France and Germany will probably have to hold their noses and somehow underwrite
Greece’s Mt. Olympus of debts even though that violates EU rules — or risk seeing financial contagion
spread. The crisis is damaging the euro and undermining the entire EU.
If the crisis infects Italy, Spain and other Mediterranean miscreants, watch out. Many Europeans want
the naughty Greeks kicked out of the euro zone and maybe the EU. Other delinquents could follow.