The European bailout
Posted: Wednesday, May 19, 2010 8:01 pm
By: Martha R. Carr
By MARTHA R. CARR
The last minute rescue of the Greek economy has a lot of similarities to bailing out the alcoholic sibling who sulks in the back seat on the drive home from the drunk tank. Neither one is really remorseful or even grasps the enormity of the problem but they’ll take the help and the money anyway and assume there’s more where that came from. Think AIG, Bear Stearns, Lehman Brothers, and even Goldman Sachs who had Warren Buffett.
Greece is the same economy that was paying government workers for a 14 month year and only recently started to make a more aggressive attempt at collecting taxes in order to pay their bills.
The citizens responded by going on strike, including the tax collectors, and rioting, killing four bank employees. They seem to have no real awareness of just how much trouble they’re in or what it’ll take to get out.
Then there’s the role of the sober big brother who can see the looming disaster and keeps stepping in to clean up the mess hoping this is the last time. It never is and it’s the perfect recipe for going crazy and creating financial disasters for the enablers. Think taxpayer, taxpayer, taxpayer.
This is going to get to a place where each of the other 11 major countries that use the euro exclusively, plus a handful of smaller countries who have a combination of old and new currency and whose value is tangled up with the euro, are going to have to make a few hard choices. They’re going to have to choose their own economy or the economies and people of the countries around them. Voters in any country don’t really like bailing out their neighbors that they see every day. They’re going to like this even less.
Germany, which has already been through a painful reunification between East and West and has always been better at cost-cutting, may be the first to start demanding more concessions or getting up from the table and leaving. Britain, whose Labor party has been beaten up in the recent election, may be next.
Even though on Sunday the European finance ministers, the International Monetary Fund and the European Central Bank pledged almost a trillion dollars to try and fend off the collapse of the Greek economy the worst is far from over, and in fact they may have only delayed the economic pain.
A bigger problem is that they are not the only potential country in trouble. Spain is considered the most likely to overheat next and their economy may be too big for a rescue by the others. Portugal and Ireland are also on the watch list.
A widespread collapse that no one planned for will spread out in every direction and could endanger a fragile recovering US economy. It will also test the Obama administration and their ability to not come to everyone’s rescue because surely the other g overnments, who are our biggest allies, will come bearing hat in hand.
The potential danger from resentments between borders is very real and lesser problems lead to the First World War and that was before nuclear warheads had been discovered and terrorism was so rampant. It’s not something that we can dismiss or ignore and may turn out to be the greatest test our country faces in this generation.
We are already fighting a war on two fronts in Afghanistan and Iraq that we are unable to extricate ourselves from and the looming fallout from tying diverse cultures together by their pocketbooks may provoke a third war. Secretary of State Clinton is going to have to walk a very careful line to keep tensions down across Europe and everyone working together till we are well clear of this tangled mess.
However, keep in mind that there are two things human beings are willing to fight over at the cost of their own lives: money and religion. We already have the latter raging across the Middle East and creeping into Times Square. If we don’t create a sustainable plan to deal with the collapse of the euro, then money may join the fray and it will all meet in the middle. Just in case you’re not getting it, the US is the sober big brother standing in the middle. Buckle your seatbelts, it’s going to be a bumpy ride.
Martha’s latest book is the memoir, A Place to Call Home. www.MarthaRandolphCarr.com. Email Martha at: Martha@caglecartoons.com.
©2010 Martha Randolph Carr. Martha’s column is distributed exclusively by Cagle Cartoons Inc. newspaper syndicate. For info call Cari Dawson Bartley at 800 696 7561 or email Cari@cagle.com.
Published in The Messenger 5.19.10