An analogy: Greece is to Europe what distressed American assets were to the U.S. in the Emergency Economic Stabilization Act of 2008. In 2009, Greece was bailed out of a considerably dire debt (deepening over the course of a decade before the crash) by its wealthier neighbors. The rationale for such “generosity” suited the aim to protect the economic recovery and future of Europe as a union, in a similar manner that the U.S. government made the call to inject billions of dollars (private and public) into ailing financial institutions deemed invaluable to U.S. stability.
Similar but not entirely comparable:
The 2008 Bank Bailout in the United States was a sweeping measure strategically implemented in urgency by a sovereign government vested with the power to act in their country’s best interest; the 2009 bailout in Greece was a sweeping measure that acts in the best interest of Europe, a continent, comprised of numerous sovereign nations with distinct governments, political systems, and a history that defines them.
The delineation of responsibility in these two situations destroys the above analogy, placing aside the matter of how effective these executive decisions ultimately were at attempting to address the immediate problem of imminent economic collapse; geo-political accountability distinctions and exist for a reason. The bailout to Greece from their neighbors, while indisputably needed, places Europe in a position of symbolic sovereignty, operating in a manner similar to an independently governed entity with the executive right to act on the behalf of its people.
As influential as the sum of its parts, Europe as a continent has made provisions in the direction of solidity in the international community by creating the European Union, an allied partnership of 27 countries; as of 2002, 17 of those countries are in the Euro Zone, unified by the collective replacement of their respective national currencies by the Euro, the second largest reserve currency in the world, following the United States. The strength of this currency, like any currency, is contingent on the strength of whatever reserve is used to back it up.
Greece’s economic woes continue to take one of the largest tolls of all European countries on the overall GDP and stability of the entire region, warranting the concentration of EU efforts to make sure the bailout package has been put to good use.
Not only has the immediate address of the debt problem in Greece taken the form of a short-term rescue mission as per the instruction of the EU, but austerity measures, which call for spending cuts, budget re-evaluation, and credit freezes, have been and continue to be applied throughout the European continent. Further, it is stipulated that these measures be applied in the manner prescribed by EU officials, who seem to have executive say in what happens to Europe as a whole and its parts.
In exchange for the bailout money, essentially, Greece is paying the price in the form of compliance. To compare this situation to the one in the United States would hold Europe accountable for the many distinct economies present in the “Union,” which they technically are not, but figuratively are. Europe, at this time, is made up of countries which are so called because they are meant to govern themselves and are not state territories with a set of powers superseded by a federal or central government.
In the U.S. bailout, to the chagrin of private citizens, bitter with debt and ostensible helplessness, private entities like banks and mortgage back securities/assets received financial assistance from the government they had placed there to make these kind of decisions on their behalf. The anticipated return for this action, however controversial, was to prevent a large scale devaluing of U.S. assets, improvement of the financial crisis and restoration of good faith in capital credit. The devaluing of these assets, for which we as a government oook responsibility, would inevitably compromise the U.S. financial system and threaten economic standing and relationships in the international community.
Unlike these U.S. financial assets, however, which as functioning entities allowed and welcomed U.S. governmental accountability for their collapse, Greece, a sovereign country, aims to take responsibility for itself, its currency and economic future. Talks to reinstate the drachma as their national currency and cut ties to the widely implemented euro point to a reestablishment of accountability for their government and a strategic navigation of the next steps in grappling with their participation in the European Debt Deal, and the world.
Pride is not always a bad thing. Back in September, the international community acknowledged that the operation of the European Union, created for the collective good of the region, might as well be its own government and was moving in that direction. Money making the world go round, I figured that made sense but mused:
“Can European countries possibly give up histories of fiscal sovereignty for the greater good of pulling each of its economies out of the gutter? Will they act like petulant children and find ways to maintain a sense of national distinction in the face of a forced humility?” (“The Contrarian”: If You Can’t Beat ‘Em… 9/13/11).
Petulant children don’t attempt to carry the burden of personal responsibility when they have someone looking out for them in exchange for giving up their identity as independent creatures, though.