The 2007 recessions in the Eurozone, and elsewhere, were not caused by governments with excessive deficits or by national debt, nor even by the astounding levels of tax evasion, corruption, cronyism and sheer incompetence of the Greek establishment, as voted for by the Greek people, over generations.
The crises were caused by the financial services sector. The argument that there should have been firmer regulation misses the irony that the financial services should be honest regardless, but human nature being what it is, where there’s money there is greed and greed thrives where there is weak regulation.
When the banks imploded, they should have been left to face the consequences of their actions, just like any other business in the private sector. But someone at EU level — and who and why remain great mysteries — decided that no euro bank would be allowed to default, no matter what the financial cost or the toll of human misery.
So now, Greece has cut its running costs to the bone and has a surplus, even though it is still as misgoverned as always. Yet in order for the Troika to provide the funding, Greece needs to repay its next debt instalment, and Greece has to cut its services further.
So the payment due to Greece by the Troika will not be used for pensions or to run schools or hospitals, it will be returned to the ECB in debt repayments, except the Troika can charge the Greek people interest. Insanity.
It is utter financial illiteracy to make a country borrow money, so it can use that money to repay the money it has just borrowed.
The debt of all Eurozone countries should be pooled into euro bonds. The countries should then face up to their own internal failings and reform as needed. It is the only way for a monetary union that isn’t part of a political union to work.
If this crisis has proven one thing it is that there is no shared EU humanity. Greece should now be brave enough to call an end to the myth and put itself first. Greece can still teach the world about democracy and have the courage to walk away from the Troika.