Greece in turmoil - Hard lesson we’d all do well to learn

THE Greek parliament voted for the first bill to impose terrible austerity measures demanded by the EU/IMF yesterday. Voting on a second bill, to complete the process, is scheduled for today.

The significance of these high-wire events in Europe’s and Ireland’s immediate future can hardly be overstated. It would be stretching it to say that the unity that has brought peace and, for a long number of years, prosperity to most of a Europe once regularly torn apart by wars, is in jeopardy. Nevertheless, a collapse on the scale likely if Greece loses all external support would be a step towards the chaos that we imagine — wrongly — is consigned to history. It would also confirm that EU solidarity is neither limitless nor blind.

All across Europe, especially in the weaker economies, citizens’ and governments’ aspirations are being crushed by unpalatable realities. Even the fundamentals of our capitalist system are coming under scrutiny in ways not seen since the last century.

All of that is the theory but the reality is that Greece is, like Ireland, utterly broke. It has admitted that it does not have enough money to pay salaries or pensions for another three weeks. In that awful situation it had little option but to take the EU/IMF medicine no matter how unpalatable. What is the alternative?

The situation is so very critical that prime minister George Papandreou is in talks on a second package, roughly the size of last year’s €110 billion deal. These vast figures condemn the country to decade upon decade of draining repayments. Just like Ireland.

We once kicked the traces when we were compared to Iceland — one letter and six months — but the comparison with Greece is less easy to dismiss even if the scale of debt, the entrenched sense of entitlement and corruption are different.

That country has an effective private sector but an utterly dysfunctional public sector. Taxes are not collected, government decisions are not implemented, and, like our guards, everyone wants to retire in their early 50s. And, it seems, even the most basic functionary expects to be bribed before they do their job.

We do not have that mountain to climb, ours is more than steep enough already. We now have the benefit of seeing what happens when reform is blocked or comes too slowly to convince the IMF/EU that our society is viable and worth supporting. In this context it is indeed frightening that we’re still harrumphing about executive bonuses, hospitals running wildly over budget and suggesting that savings of less that €1 billion under the Croke Park deal are even a good opening gambit.

Greece is having to face a cruel reality, but is our grip on reality strong enough to avoid their fate?