This Greek Tragedy Could Be Europe's As Well

However the Greeks vote on Sunday, they are likely to be in for another round of suffering. If they support their government by voting "no" (probably the wiser vote), it is likely to force Greece to abandon the euro for its own currency. The cost of living and inflation will spike, although a cheaper currency will eventually allow the country to become more competitive. If they support Angela Merkel with a "yes" vote, they will be capitulating to even more austerity, high unemployment and poverty in virtual perpetuity.

Like the chorus of a drama played out in some ancient Athenian amphitheater, Europe's politicians and pundits chant that the Greeks deserve their fate; they violated the sacred dictum of the Gods of Finance that countries must not live beyond their means. Therefore, they must be punished.

But the act of hubris that brought the wrath of Merkel and the bankers down upon Greek heads was not that they borrowed too much money. Greece is hardly the only country having trouble paying its bills. And these same bankers have been refinancing Greece's debt for the past five years, knowing quite well that it could not pay it back.

The arrangement was part of a sweetheart deal between the Greek elites and the country's creditors.

In essence, the European bankers lent money to the Greek government to pay the debts, plus interest, that it owed -- to the bankers. The refinancing was conditioned on dramatic cutbacks in domestic social spending and the sell-off of public property to private investors. And despite the bankers' talk of "reform," they were content to allow the Greek elite to continue evading taxes - which is a major reason why the Greek public sector is chronically short of money.

The financial oracles foretold that hard times would drive down Greek wages, which would attract more investment and restart economic growth. But as economic science, as opposed to free-market idolatry, predicted, the spending cuts hobbled growth and drove the country deeper into the red. The bankers' answer: more austerity.

Economy is a word derived from the Greek. As is democracy. And by January 2015, a fed-up Greek demos elected Alex Tsipras of the leftist Syriza party to be prime minister. Tsipras does not deny Greece's' responsibility for its debt, but he argues that those who lent to Greece knowing that it could not pay back the loans were also responsible. Therefore, they should share Greece's punishment by forgiving some of the debt.

This of course is the doctrine behind private sector bankruptcy settlements throughout the developed world. But Tsipras' proposal that investors as well as workers share the pain is a blasphemy that Merkel and the others who represent the Gods of Finance can not tolerate.

As the history of the negotiations between Syriza and Greece's creditors over the last few months makes clear, Merkel's real objective is to destroy Syriza, setting an example to others in Spain, Portugal, and other weaker economies who might be tempted to make a similar challenge to the divine right of multinational finance to dictate their lives.

But the triumph of the European financial elites over the continent's left may be shorter lived than they think. Their hard line against Syriza may be seeding something far more threatening to the dream of a united Europe -- the return of the old Gods of Nationalism. Mobilizing public opinion against the Greeks has produced some ugly sentiments, e.g., workers and taxpayers in Germany expressing contempt for "lazy, profligate" Greeks. And as Merkel has now become the de factor leader of Europe, there is growing resentment around the continent against the "selfish, arrogant" Germans.

There is a limit to the people's pain. The bloody history of Europe tells us if they cannot find relief from the center or the left, they will go elsewhere. In Greece, the fascist Golden Dawn Party is waiting in the wings to divert popular frustration to their reactionary anti-immigrant agenda. Further off-stage -- in France, Britain, Italy, and Germany itself -- one can hear nationalist rumblings that the institutions of a united Europe were created to stifle with widely shared prosperity.

The ancient Greeks were polytheistic -- they had many jealous gods. It may be time for Europe's leaders to give less attention to the gods of Finance, and more to the gods of History. Otherwise, they may find themselves having revived a nasty old drama that we've all seen before.

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