By David Schane – San Francisco Bay Area, USA, June 28 2015
While the Greek crisis has been extremely well documented, I saw a couple of article links which spurred me to think about a few inter-relationships that have been less scrutinized. The first was an analysis on the recent Spanish elections while the second was a piece coming apparently from an analyst within Goldman Sachs.
My personal take is that the juxtaposition of these two pieces shows the vulnerability of the “tectonic plates” under the surface (especially when we consider the growth of anti-austerity parties across Europe). On the other hand, maybe there are perversely those (Goldman would apparently argue) who are quietly hoping the Greeks leave the European Union so that the ECB can more aggressively pursue a currency devaluation under the veil of legitimacy and necessity.
Perhaps though, policymakers are underestimating the repercussions of a Greek departure, especially when you consider the rise of anti-austerity parties (as the article on Spain describes). Perhaps also, the nearly seven years since the Lehman bankruptcy (September 08 as I recall) is just enough time to dull policymaker’s minds as to how traumatic that whole experience was. Now almost seven years post Lehman, policy makers might be deluding themselves that they have everything under control, as time “dulls” memory and potentially breeds over-confidence.
It reminds me a bit of how one of my history professors analyzed how the American Civil War erupted in 1861 (and not before). He believed that one factor behind the timing was that famous leaders who had first hand relationships with key personalities of the American Revolution (like Thomas Jefferson) had all died off. He particularly pointed to the famous US Vice President and South Carolina Senator John Calhoun (who died in 1850 but had worked with American revolutionary leaders like Thomas Jefferson earlier in his life). People like Calhoun (this professor said) would never have advocated for the South’s total independence as they had first hand relationships with leaders like Jefferson who had created the US Union. So while Southern politicians like Calhoun increasingly advocated for states’ rights, they were mindful how difficult it was to create the Union – and it was only the successor political generation (post Calhoun – without direct connections to the founding of the Union) who were prepared to countenance dissolution and Civil War. Thus, this former professor reasoned the Civil War happened in 1861 and could not have happened before in the 1840’s (because leading Southern politicians like John Calhoun who had direct relationships with the founding fathers of the US were still alive then).
So similarly maybe enough time has now passed for European leaders (due to fatigue and the belief that the crisis is over) to let Greece go. They may be underestimating though that dissolution once it actually happens for the first time anywhere (and has thus overcome the “metaphysical impossibility” that policymakers would like us to believe) can morph quickly and gain converts. That’s especially since self-expression at the ballot box can sadly be threatening to policy-makers (especially when austerity and bureaucratic centralism has fueled popular resentment).
So, that’s why I’ve attached these two article links juxtaposed above – because I personally think European policymakers do NOT have things under control as much as they might think and believe. Moreover, the suggestion that some European leaders may perversely be rooting for a Greek exit may well illustrate a type of thinking (and potential overconfidence) about dissolution that probably could not have even occurred one year ago as only now (like in the timing of the US Civil War) may there have been enough passage of time (since Maastricht and the Lehman Brothers bankruptcy) to support that kind of reasoning.
David Schane, MA in International Relations
International classical concert pianist, expert in finance and foreign relations
( from the editor: we thank Mr. David Schane for sharing with us his thoughts on the EU-Greece Crisis. Having traveled the world and lived in Europe as well, we believe Mr. Schane’s thoughts are vey valuable. They convey both a historical global view and a differentiated U.S. perspective on the unfolding crisis in Europe )