Greece — debt, deficits and de­fense of the Euro­pean ideal

The China Post - - COMMENTARY - ARTHUR I. CYR

“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

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