Paying for our sins

Greece is not being targeted by speculators nor have markets subjected the country to «psychological terror,» as Prime Minister George Papandreou said recently. Markets work along market lines, ungenerous as this may sound. What we are experiencing today is the unavoidable consequence of chronic distortions. Greece was not prepared to join the European Community but it did so thanks to efforts by late statesman Constantine Karamanlis and Valery Giscard d’Estaing, who was France’s president at the time. The Germans did not like the idea but eventually backed down. Likewise, Greece was unprepared to join the eurozone but it was admitted thanks to a great deal of creative accounting which went on even when other states had abandoned the practice. Germany was again skeptical of accepting both the Greeks and the Italians into the common currency area but it finally lifted its objections. Greece is paying the price for mistakes committed over the past 30 years. The government has taken unpopular measures and the European Union has installed a safety net for nations that are on the verge of bankruptcy – and Greece is first in line. However, interest in the treasury bills issued a few days ago by the government was more than double that in January when the economic policy planners in Athens were still brainstorming, as it were. Some hold that political decisions can manipulate the economy and the markets. But everyday life runs counter to such an opinion. The appeal of the market, of capitalism, in other words, is that it cannot be tamed; it does not obey political logic. The crisis runs so deep that a few unpopular measures will not do. Greece needs nothing less than radical reform. Or the country’s citizens, and the political elite, will be overcome by a feeling of futility that could jeopardize not just the economy but the political system at large. Let’s hope those fears will not materialize.

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