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SANDERS: The glory that was Greece…

- - Sunday, February 19, 2012

ANALYSIS/OPINION:

There is a terrible poignancy to the current Greek crisis.

Its essence does not revolve around Greece's role in the European Union or the eurozone, per se. After all, before the fall, Greece constituted only 1.8 percent of the gross national product of the world's largest trading bloc. Nor, indeed, as time goes on, is its euro crisis likely to be unique: Several other southern European economies appear to be following in its wake.

What does make Greece special is that it once again has become the focal point for an enormous decision for Western civilization.

In the classical past, Greece's city-states fought off depredations from the seemingly overwhelming authoritarian pomp and power of neighboring Eastern empires, in the struggle to maintain its own relatively free, commercial societies. Today, Greece is the scene again of a decision on the nature of European civilization. The future of continental integration is likely to be decided there, and not - as German and French politicians hope and plan - by the Eurocrats in Brussels.

If a way cannot be found to finesse the Greek debt crisis without destabilizing its political system, not just the European Union and the euro will fail. More important, as southern Europe slides into the abyss, the whole effort to build universal post-communist democratic regimes is in danger.

The seesaw negotiations now going forward between Athens and its creditors are not reassuring. The kind of bailout now proposed is probably no more than a Band-Aid masking deeper and more difficult problems likely to drag on without end.

That's because it was, of course, preposterous of the elitist Brussels "planners" to pull Greece's Third World economy into a common currency alongside the world's industrial leaders of northern Europe. Looking back with 20-20 hindsight - although some of us argued it at the time - combining national economies through a single currency while disregarding their level of sophistication and competitive advantage was doomed, particularly without central control over their macroeconomic policies.

Europe is now paying the price along with its trading partners, not excluding the U.S., as the euro's failure ripples out across the world economy. But perhaps more important, Europe is deciding, once again, whether it will take a more difficult road toward integration requiring bottom-up compromises among old and distinctive national and economic cultures. The alternative, seemingly the choice to be set in place led by a powerful Germany, is a centralized command bureaucracy dictating every aspect of the new integrated society.

Instead of a massive refinancing effort to reset or, indeed, refit the euro, the penny-ante game being played by Berlin (and Paris) is self-defeating. German Chancellor Angela Merkel, styled as the new "Iron Lady" and leader of Europe's largest economy, contradicts herself almost daily - a pale imitation of Europe's first Iron Lady, Margaret Thatcher. But Mrs. Merkel has little choice: Her German constituents are not of a mind, as were the relatively well-off Americans after World War II, to bail out a devastated Europe.

However valid are the criticisms of the Greeks - living beyond their means, the corruption and inefficiencies - the austerity program being dictated by Germany and other creditors will not solve the problem. The kinds of reforms required would take years, if not decades, to achieve. Meanwhile, the cutoff of credit and sudden demands to slash living standards are probably not sustainable with a voting public. There is not only a flight of capital but a brain drain of the young and talented, who are at the cutting edge of any real economic progress.

All this was predictable. Greece, however thin the bloodlines leading back to classical times, has in the past century been a litmus test for all that ailed Europe. A nation-state created in the 19th century out of the dreams of foreigners as much as the Greeks themselves, a particular victim of Nazi brutality (and Mussolini's jackals), the scene of civil war beating off Stalinist totalitarianism (with President Truman's help), a subsequent incompetent military dictatorship - modern Greece has seen it all. Now the economic and political bankruptcy of Europe's nanny states is getting its first test there. It's only fitting.

So, indeed, there is merit in the chauvinistic Greek defense of its "rights," even bankruptcy. For again, in its own way, this crisis may be another Thermopylae in defense of true European values.

Sol Sanders, a veteran international correspondent, writes weekly on the intersection of politics, business and economics. He can be reached at solsanders@cox.net and blogs at www.yeoldecrabb.wordpress.com.