Greece lightning

Anyone with half a brain knows the euro cannot survive in its present form. Greece is insolvent, broke, bankrupt: its government cannot repay its debts and will never be able to do so. Pumping in bailouts of billions of euros may make the country liquid for a time, but it is nothing but political sticking plaster. It will not improve solvency; it merely delays the inevitable.

When a nation does not bear the consequences of its actions, its behaviour is distorted. ‘Moral hazard’ is a natural consequence of insulating the profligate from punitive judgement. Greece would have behaved differently if its people had been fully exposed from the outset to the risk, because pain encourages responsibility.

When we do not bear the consequences of our actions, there emerges a false sense of security. While abortion and the ‘morning-after’ pill are available on-tap, why not indulge in endless irresponsible sex? And so it is with the EU and the IMF granting Greece another bailout, another abortion, because the consequences of delivering the child of default are too frightening to contemplate.

But that baby will be born: default is inevitable. And when the lightning strikes Athens, the thunder will reverberate throughout Europe – principally in Lisbon, Rome, Dublin and Madrid. And the gathering storm will make the collapse of Lehman Brothers seem like a walk in the park. For when the banks of Portugal, Italy, Ireland and Spain begin to teeter, there isn’t a nation in Europe which will escape the gathering storm.

The euro was always a gamble, especially for the Hellenic branch of the Indo-European family. Why they ever ditched their ancient drachma – the currency of Plato, Ptolemy and Alexander the Great – is a mystery, and evidence, if any were needed, that they don’t deserve the Elgin Marbles. A nation which loses its marbles and squanders its sovereignty without regard for its unique heritage as the cradle of Western civilisation – the birthplace of democracy, the fount of Western philosophy and literature, the creator of the Olympic Games, the originator of historiography, political science, mathematical principles, and our dramatic traditions of tragedy and comedy – does not deserve much sympathy for its economic woes.

The introduction of the euro artificially decreased the interest rates of many EU members countries, in particular those with a weak currency. The countries who benefited the most from this decrease were Greece, Ireland, Portugal, Spain, and Italy.

And which countries are now carrying insupportable debt and suffering intolerable deficits?

Just to fulfil the dream of being at ‘the heart of Europe’.

And, bizarrely, while Greece now struggles to survive amidst public sector strikes, austerity measures including pay freezes, tax hikes and extensions to the official retirement age, soaring unemployment and civil unrest, Tony Blair still believes the UK should ultimately join the euro.

He talks of the need for a secure foundation – the rock of EU-wide economic governance. The single currency was built on sand: it was destined to founder without political union, which will now arise.

But remove from a nation the right to set its own interest rates to suit its own domestic economy, and in times of turmoil it is left either to tinker with taxation or slash spending. Since the people are not particularly disposed either to high rates of taxation or to cuts in their public services, disquiet turns into protests; protests become marches; marches become riots; riots become social turmoil.

And social turmoil slips into civil war, which is precisely what looms.

Never forget that the EU’s answer to the EU’s problems is invariably ‘more Europe’: every crisis is an opportunity for more regulation and centralisation. And the sovereign debt crisis that threatens to engulf European financial markets is no exception. The eurozone will be stabilised economically in accordance with Bundesbank discipline and bound politically by Teutonic politico-militarism. The German constitutional court would have it no other way.

All it will lack is a leader, an emperor, a religio-political philosopher-king of sufficient stature to strut after the fashion of Napoleon, to hold the allegiance of the people führer-like, and to lift them out of the economic morass in which they have sunk.

But he is surely coming.

When a government guarantees the liabilities of a financial institution, it risks weakening the currency and causing an increase in interest rates, with all the consequent unemployment, recession, inflation and increased poverty. This is an undoubted moral issue, for people are reduced to hardship and depression, firms are condemned to closure, more workers to unemployment and more families to homelessness through unprecedented levels of repossession. The total number of suicides, heart attacks, divorces and mental breakdowns is never known.

God cares for the poor, the oppressed, and the underdogs in society. He pours his wrath upon those who corrupt justice or create economic machines designed to provide more wealth for the wealthy and deprive the poor. The story of Naboth’s vineyard in 1 Kings 21 establishes that authorities are not free to pursue any policy they please or to ride roughshod over the rights of the poor. These same concerns are vehemently expressed by the prophets Amos, Hosea, Isaiah and Micah, writing in the 8th century BC. God demands conscience above political conviction, and a government which places narrow economic considerations above liberty and justice is guilty of worshipping Mammon above God.

Perhaps the natural moral order demands that they be allowed to fail in order that the profligacy and irresponsibility of idolatry might be rectified. Bankruptcy is humiliating, but it is the only just corrective.