Greece may be marinating but the world is on a spit

The hard-nosed leaders of Europe are still considering what to do with Greece.  Should they impose draconian conditions on Greece in return for assistance or should she be expelled from the EU before she contaminates the rest of the European family and perhaps the world?

 Is Greece a recalcitrant child or is she really an abused mother? Is she the birthplace of Western civilization and the cradle of democracy or will she be the graveyard of global economics? Has Greece been imprudent in her borrowings or were others lax in their lending?  Will Greece be saved as a matter of principal or will she be saved to protect the collective posterior of others? Will Europeans and the Western world wake up to the larger picture or will they die a slow death whilst being “colonized” by Islam without seeking reciprocal rights from Islam? Will Europe take the opportunity of Greece’s perilous situation to display leadership and strength or will it crumble as it flaunts its indecision and disagreements?  If Greece is removed from the E.U. will they go on to save Portugal and Spain because they are too big to fail or will they instead continue to disembowel their membership?

As a member of the Euro club, Greece does not have the option of quantitative easing (money printing) that the USA and Britain have availed themselves of so richly. Nor does she have the option of unilaterally devaluing the Euro in the same way that Venezuela recently devalued its own currency. Her only options (if she was to remain in the EU) would be to submit to either the EU’s or the I.M.F.’s cod liver recipes.  This is very dangerous and highly unlikely. After almost 400 years of Ottoman rule Greeks have been left with a healthy disrespect for authority and an outright distaste for taxes. Yet this in fact may be the only avenue for hope strange as it may seem.

Tax evasion is so rampant and imbedded in Greece that even capturing 20-30% of evaded taxes may have the two-fold effect of not only reversing the deficit but also boosting the Gross Domestic Product of the Greek nation without any additional production. All of a sudden one would also witness the actual and projected deficits falling away as a percentage of GDP.

On this basis, Europe possibly can provide itself with an escape clause and Greece with a limited window of opportunity to reverse its position. Europe can provide a guarantee on any borrowings up to a certain level for the next 12 months in return for adherence to certain performance indicators. If Greece performs, then all is well and good. If not, Europe and the world have 12 months to prepare the divorce and eviction papers without allowing a domino effect to take place.

If Europe instead cuts Greece off without some opportunity to restore good governance, it will be Europe that is in fact cast adrift. Failure to save a nation with only 2.5% of Europe’s GDP is quite telling of Europe’s depth and commitment to the EU. The flow of funds that has been witnessed from the dollar to the Euro for both political and economic reasons will cease and possibly reverse.

Make no mistake, cutting Greece off and allowing her to default may in fact be a gift to Greece in the longer run despite short term chaos. Modern Greece since 1821 has spent a great deal of its time in default so once more would not be a black mark. In any case chaos is a highly energizing atmosphere for many Greeks.

But the west must also realise that the Hellenic world and in particular Ancient Greece, have already given the world the formulas for economic management and success, which the West in particular has sought to ignore. Consider briefly the following points:

1.     The Ancient Athenian coinage, the famous silver coin with the owl and Athena, was recognised and used throughout the Mediterranean and Mid East for centuries. The strict adherence to a clean silver coin that was not in any way adulterated by tin or lead gave Athens great status and access in all ports of call. This was in fact the first recognizable silver standard of the world and it fulfilled ALL of the characteristics of money including “intrinsic value”. It was the Romans who started the concept of fiat and currency debasement by eventually circulating coins which had only a film of silver on them.

2.     The next great coinage of the Greek world was the solidus or bezant of the Byzantine Empire. Once again this coinage was the reserve currency of its day due to its purity and lasted for over six centuries.  In short, the Hellenic World has provided the longest periods of honest money.

3.     It must also not be forgotten that the mammoth debt burden of this day was also experienced by Athens more than 2,500 years ago. The situation had reached such dire levels that whole families had become indentured slaves. At that time, the famous law giver Solon was called upon to solve the problem. Solon simply went about his task by cancelling debts and restoring balance. This is the inevitable solution for today’s world economy, which unfortunately banks and governments believe they can solve only by issuing further debt.

4.     Furthermore, the great lesson that investment is superior to consumption was also taught to us by Ancient Athens. In the 5^th century BC it had become clear to Athens that the great Persian King had every intention of invading and conquering Greece. Athens could see the great build-up but was hamstrung by finances to react. But then a miracle (which Greeks have a monopoly on) took place. In 484-3 a deep, rich and seemingly inexhaustible lode of silver was discovered in the largely marginal silver mines of Athens owned by the State. The public debate that ensued was whether the profits should be distributed to the adult citizenry, or used to build ships for defence. The famous Themistocles won the day, had the fleet built and Athens went on to lead a crushing defeat over the Persians at the Battle of Salamis.

5.     Finally, readers must be reminded that Athens kept her gold on public display by having it incorporated as detachable plates on the statue of Athena in the Parthenon. The Greeks knew and understood the weakness of men, so they devised this brilliant method of transparency. When war or some other emergency required money, the plates were removed and used to fund their requirements. Where is the transparency in today’s finances?

The examples could go on and on, and the finer detail is both didactic and cathartic. I urge readers to read the great scholars who have brilliantly narrated the above events. Unfortunately the convenience of fiat money and the schemes it enables have instead given the world a front row seat to an unfathomable abyss. So just remember that while Greece may be marinating in the sins of its economic and political mismanagement, the world in fact is on a spit with a bed of live coals beneath it. Greece has simply exposed the soft underbelly of corrupted and uncontrolled globalization.

The world also needs to remember that every great battle fought by Greece from antiquity to World War II required sacrifice which she made without complaint. While others have received apologies, monuments and compensation for their suffering, Greece has simply made do with polite compliments.

While others have taken her monuments or reproduced her designs and literature for profit, Greece has never sought royalties. Her words form an irreplaceable foundation of the English language and her ideas and concepts are the yeast of the Western world, yet she is content to simply be a proud but often impoverished mother. Perhaps it is time for the Western world to repay a debt of gratitude by not allowing its birthplace to be subjected to the tyranny of opportunistic political and economic manoeuvrings by nations, corporations and individuals with lesser ideals than those that Greece bestowed upon mankind.

There is no doubt that the challenge of Greece is a great fulcrum for Europe and that the choice of either side could prove disastrous for the world as a whole. Nevertheless, this is the first great test for the EU and if it fails to support Greece meaningfully and fairly, it will be subjected to the old Greek saying that goes like this: “he who urinates in the sea will find it in his salt.”