Greece — debt, deficits and defense of the European ideal
“The country that invented drama and democracy is not disappointing,” is how Bloomberg News described unfolding political and economic developments in Greece. The phrase was used in a news analysis several years ago, but remains apt to the now long-term European melodrama featuring the Greeks center stage.
After being shut down for five weeks, the Athens stock exchange opened on Aug. 3, and almost immediately dropped — fast. By the end of the trading day, shares were down by 16.23 percent. However, there was has been no contagion, no region-wide comparable decline.
Nonetheless, the news media specialize in alarm. On a nonstop basis, scare headlines and tense media commentators warn of the potential crises and collapse which may — or may not — become reality.
In following such reports, keep in mind that news organizations themselves, with notable exceptions such as Bloomberg, confront their own commercial scary survival scenarios. News reporters are concerned, often obsessively, about keeping their jobs. Nonstop sensationalism is one result.
Bankers and business executives benefit long-term from reliable income streams, but for politicians stirring up turmoil is often essential to advancement, and even survival. Politicians and the press feed off one another. From ancient times, bread and blood have provided contrasting core elements in dramas.
Failure of the Greek parliament to select a president led to elections on Jan. 25. The left antiausterity Syriza party emerged with the largest bloc of seats, and formed a so-far workable coalition government with the conservative Independent Greeks. Hostility to the European Union (EU) and imposed austerity measures unites this political odd couple.
Prime Minister Alexis Tsipras held a referendum which strongly rejected austerity. The government nonetheless accepted tough measures — and has survived.
The common currency of most — though not all — members of the EU is the euro. The ongoing Greece debt crisis adds to possibility the currency will fail. Resulting concern leads to speculation that Greece will leave the euro zone, which might in turn spark a general disintegration of the European currency. Historically, a monetary union among other sovereign independent nations is extremely unusual — though not unprecedented.
The European Union has great- ly broadened geographically and deepened commercially. A unified market was achieved relatively quickly in the early 1990s, as national business barriers were ended. Multinational corporations have been instrumental in this integration, and foster expanding transnational capitalization. Focus on the future of the euro as well as Greece masks this reality.
The United States is inevitably engaged continuously with the political and strategic as well as economic developments in European nations and the north Atlantic region. This means there are opportunities as well as challenges in the continuing economic stresses within the EU.
Greece and Turkey traditionally are bitter rivals over Cyprus. A Greek-inspired coup led to Turkey’s 1974 invasion of the island. However, more recent years have brought cooperation, notably in humanitarian relief following the devastating 1999 earthquake in Turkey.
Germany is the economic leader of Europe, but the U.S. has premier economy and military power among Atlantic nations. NATO provides the strategic umbrella for reliable commerce.
John Kerry is proving an exceptionally effective secretary of state. He can cement his legacy of accomplishment by using unique American strategic leverage to encourage Greece-Turkey cooperation, and wider regional efforts.
NATO as well as the EU facilitate cooperation and make war less likely. U.S. leadership is an essential element in this mix. Arthur I. Cyr is Clausen Distinguished Professor at Carthage College and author of ‘After the Cold War’ (NYU Press). He can be reached at acyr@ carthage.edu