9 January 2015

Arrogance of Europe’s ruling class brought ruin to Greece


Some of the answers seem to lie in Greek mythology. Procrustes’ bed: too short, and you were stretched until you fitted: too long, and bits were chopped off until your dimensions matched the space. That is not a bad analogy for Greece and the European single currency. The Trojan Horse: “Fear Greeks bearing gifts,” said one priest, but apart from Cassandra, no-one took any notice. The modern equivalent should have been “fear Greeks bearing central government financial figures” and still no-one took any notice.
But Greece is a symptom as well as a crisis. Everyone who had given the subject two minutes’ thought knew that it was absurd to allow such a backward country to join the single currency. The fiscal system was a shambles; government spending was out of control; public administration was burdened by a Pelion piled on Ossa of public dishonesty. One or two Cassandras had been proclaiming the need for reform. No-one was paying attention.

That all leads us to the outer core of the problem: Euro-arrogance. In Brussels, those in charge knew that the government statistics which the Greeks would present as part of the price for entry amounted to a Trojan Horse full of monopoly money. But there were two assumptions. First, that as Greece was only about two percent of the Eurozone’s GDP, its moral delinquencies could be swept up in the small change. Second, that the great European idea was far too important to be delayed by a few million fictitious olive trees.

This takes us to the inner core: the danger of intellectuals in politics. By definition, intellectuals are intelligent. In practice, they often have a religious temperament. After all, down the millennia most of them were employed by churches. So: you have people who approach politics in the spirit of a religious vocation and who are clever enough to suppress any evidence that runs counter to their beliefs. The result can often be disaster.

The problem started with the Enlightenment. One of its consequences was a rapid rise in intellectual GDP and a new class of academics who were no longer constrained by church discipline. (In most of the second Millennium, did the churches control the intellectuals’ trouble-making tendencies or did they succumb to them? Discuss, but not here today.) During the Enlightenment, observing the primitive conditions in which most people still lived, generous-minded intellectuals decided that it should be possible to reshape society and indeed human nature. The Terror was the first fruit of their ambitions, and some of them paid the price for philosophic naivete: a Procrustean trimming by the guillotine.

That should have engendered caution: not so. Leaving aside fascism – hard to term it an Enlightenment project even if it did believe in recasting man and society – there has been Marxism, the most murderous of all. It was followed by apartheid, which was invented in Stellenbosch university, and now by the EU and its single currency.

Apropos the EU, in order to understand how all this happened it is necessary to sympathise with the progenitors’ idealistic motives. In 1945, Europe was on the edge of the abyss. Millions had been displaced; millions of relatives were hoping against hope for news of the missing. Even the survivors who still had a home and who did have access to the necessities of life were cold, hungry and frightened. “Never again” concluded many of the cleverest young Europeans: “we have to find another way of living.” They identified the enemy: nationalism – itself in many respects an Enlightenment project. In Europe, nationalism had been the equivalent of a seductive, potent, highly pleasurable and highly addictive drug. It had to be renounced, if Europe was to survive.

Although the attempt to create a European community may have masqueraded as a common market, it was a political project from the outset. The European Union – instructive name – acquired a parliament, a bureaucracy, a diplomatic service, a flag and a national anthem. The currency was the logical next step.

But there was a problem. Even in a single country, it is not easy to run a single currency. In the USA it is hard for Mississippi to use the same currency as Manhattan does. A British comparison would be Mayfair and Motherwell. In each case the interest-rate disparity is alleviated by fiscal transfers. The single currency can survive because a sizeable proportion of GDP is deployed to make it viable.

In single countries, there are other factors: patriotism, a common language, free movement of labour. In Europe, there is no common patriotism and minimal fiscal transfers. Above all, there is no democratic legitimacy. Athens could use the same currency as Aachen if the citizens of Aachen were happy to pay higher taxes to support the Athenians, who in turn thought that their hardships were a necessary sacrifice to national well-being. None of those feelings exist.

Without them, the single currency could never have worked. So how did highly intelligent men make such an elementary mistake? The answer is simple: they were intellectuals enslaved by a theory. This might sound like a suitable subject for comedy but alas, it has a tragic dimension. All over Europe, the single currency has condemned societies to economic sclerosis and to appalling levels of youth unemployment. Many other youngsters have had to leave their homelands to find work. Often, they have been expensively educated, with one or more degrees. In London, they are working in bars or as cleaners. So the European ideal is resting on foundations of individual suffering and social dislocation. This is happening in countries with no deep-rooted traditions of political stability, yet the Euro-nomemklatura presses on, impervious to suffering, impervious to commonsense, impervious to reality. But whatever the short-term consequences for Greece, this cannot longer continue without a grave risk of disorder. The single currency could well bleed to death on riot-torn streets. However noble the motives of those who designed the Euro, it could well re-inflame the disorders which the EU was meant to overcome.

Bruce Anderson is a political commentator.