Tolstoy and the Greek War of financial Independence

“War and Peace” is monumental in the way it helped create the myth of the united Russian people.  Despite its size it glosses over and completely avoids going historically where the narrative would be in conflict.  Important battles aren’t even mentioned and the massive diplomatic effort to keep the armies fed isn’t present.  The two years that follow what is in the massive book are far more interesting as the incredibly disciplined Russian army entered Leipzig and Paris backed by superior intelligence and diplomacy.  However a Tolstoy is exactly what Greece needs now, not a loan.

It was the amount proposed as aid that got me thinking.  Sure the zeroes at the end of it are dizzying and in many ways an awesome show of EuroFinanceFirePower.  But it seems that it is just enough to keep Greece ticking until just before the next national elections.  Makes sense you could say.  Get your shop in order and you get more help, Mr Papandreou.  No giving it all away to gain favours like your Dad was so good at doing.

And then there is the matter of financing risk spread.  How involved are European banks in Greek debt?  Hard to tell but if you average out the guesstimates it seems that the amount the European Union is proposing to lend is just a bit less that it would cost their banks if Greece defaulted, a lot of which are practically national affairs.  And of course if Portugal, Spain or any other similar economy went down not even the EU or World Bank could muster enough cash.

So let Greece crash please.  We need to face up to the debt and restructure it like so many other countries have succesfully navigated these past decades.  It will do us good.  During the War of Independence against the Turks, the spirit of teamwork was incredible.  Same at the start of the second world War.  People singing in the streets for joy and working together, putting aside differences and just working to a common goal.  Both those wars then had a bleak period of infighting and turmoil as “normality” settled in.  We need to shake off “normality” not invite it right now.

We need to face up to the facts.  This is war.  We need to rally up to the common cause instead of digging our heads in a hole.  And if the politicians can’t write a book as good as “War and Peace” we need inspiring figureheads to do as good a job as possible.  This article is in English because it is not my fellow Greeks that need to read it; fellow Europeans, please take the moral high road.  Don’t chicken out and use Greece as a delay mechanism for sorting out the real structural problems Europe faces.  The EU can survive Greece’s economy crashing but if we let the threat dehabilitate us, world financial markets will just keep playing the EuroZone like this forever.  Like wolves isolating stragglers in a herd of deer, it will never end.  Restructuring debt isn’t the end of the world.  Sure Argentina got ugly, but Belize, Uruguay and even Jamaica did very civilized jobs of it.  The work of people like Lee Buchheit(download an excellent paper on the topic here) shows us exactly how the alternative would work.  Sure, there is no way to exit the european union but just as we stopped using the drachma, we could reinstate it as an inbetween phase to recovery.  And if anyone wants an inspiring story of a people rising from the ashes in tough times, follow Wilma Mankiller’s story as she fought an urban war to get Cherokee people proud again on their terms.

One way or another, in five years Greece should be able to stabilize things.  But if we build crutches into the core of a newly born Europe now, the whole idea of a truly united Europe will not be able to recover for decades.  It wasn’t the Russian winter that beat Napoleon, that is just a convenient myth, like all the myths about ancient Greek superiority we keep on the backburner in Greece as an excuse not to actually work.

I am kidding of course.  Greece has major liquidity issues, bank structural problems and an unhealthy reliance on the public sector which is completely corrupt.   We need the loans but it would be great if we could organize ourselves to actually make the necessary changes without feeling some “foreigners” forced us to make them.   If Greece is forced to make these changes too fast, a whole nation will struggle to transform itself so fast.   We have no Tolstoy and no Churchill to lead and inspire us and the social connections in the country aren’t strong enough to keep it together while we mature.

 

Like a lot of important writers, Leo Tolstoy was excommunicated by the Russian (Greek Orthodox) church.  The day after this was announced students and workers paraded in his honour.  So if Fitch wants to grade Greek bonds BBB- (just above saying it is toilet paper!) I say let’s take to the streets in celebration too; if this bunch of people really puts minds and hearts to it, we can and should get great stuff done!

5 Comments

  1. Kathy Angelopouou Reply

    Alex – thanks for this.

    In my super-simple world, things are, well, simple. In trouble? Face it. Deal with it. If it means a bit of “suffering” (Ha! – in this society I don’t think we have the remotest idea of what that even means…) then so be it. We won’t die, starve or, yes,even suffer. We will become mature consumers, better heads of our households and (slightly) better citizens, owing up to our own role in this mess. Make no mistake, fellow Greeks, our collective hand led us to where we are today AS WELL. How? The way I look at it by the way we behaved as consumers (shameful, greedy), by the way we voted (for our own personal good) and by the way we turned away. From our hospitals, schools, environment. We will ultimately have to answer to our children. I don’t know what we will say. But in the meantime, for the next five years (as you estimate) let’s pull up our socks and simply accept that we may have to “suffer” for a while.

    As for the idea of building a united front – maybe, someday. I just don’t know where to look for another Tolstoy around here.

  2. james Reply

    Alex,
    A superb synthesis – but all these models still look to economic growth and the ever increasing need to consume to drive the economic health of those involved. That just takes us closer to the real edge, over which we already teater without even knowing it. This is just another oportunity for change that modern society will ignore because it’s driven by the obsession of single-generation self interest that seems as unavoidable a truth as the DNA that drives it.

    • admin Reply

      You are right, I got carried away finding a solution within the problematic state of the modern state. (And attached economy.) Times of change are a great opportunity to learn about any system. A bit like destroying an ant nest in order to discover how it works, you only get glimpses of mildly useful information really.

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