Sir, – Those contemplating the current problems in Greece might be interested to know that the Greeks have been here before – about two and a half millennia ago.
In the sixth century BC, the Greek economy was stagnating because a large part of the population was in debt to a relatively small number of wealthy aristocrats and what today we would call speculators.
This was largely as a result of usury; what today we would call the bond market. Mortgage foreclosure included the right to enslave the debtor physically as opposed the modern merely financial form.
This crisis was solved by the Greek statesman Solon, who de factoabolished much of the debt, released debtors from their guarantees and made it illegal to enslave debtors in the future. This was known as the seisachtheia. The rich were none too pleased, but the economy reportedly did get moving again.
Timeo Danaos debentes omnia nobis, perhaps. – Yours, etc,
Sir, – It is reasonable to assume that when the details of what further cuts are going to be imposed on the Greek people to protect the wealth of the German and French corporate bankers who provide such generous financial backing to the election campaigns of President Sarkozy and Chancellor Merkel, and other EU political parties, there won’t be one single mention of cuts to the salary, pension or perks paid to the Greek president, prime minister, politicians or the swath of public sector staff above a certain pay grade, and instead it will be possible to metaphorically draw a line along a certain income level and people at that line or above will again avoid any sacrifice while everyone below it will be sacrificed. Again.
It’s the same metaphorical line that the troika has used to such great effect in Ireland.
But the Greeks are not passive and docile as we Irish are, so chances are they will react against the imposition of even more austerity and the markets will get spooked again and the “efforts” of the establishment will have been in vain. Then we’ll have to have Greek bailout number four, followed in due course by another.
How many bailouts will it take, and how much damage will they do to the European project and democratic legitimacy, before the leaders of the euro zone face the reality that the only way for the euro crisis to be solved permanently is for the euro to be treated like a proper currency with a central bank that is a lender of last resort and able to issue euro bonds? And for the professional investors who chose to invest in complex financial products, in full knowledge of the risk that if those investments went wrong that they would lose their investments, to accept their losses? – Yours, etc,