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Greek Crisis: A Perfect Case Of Pathological, Collective Denial

From Athens' corrupt and radical politicians to the staid bankers and diplomats of Brussels, all are to blame for the crisis in Greece. An un-lesson for modern politics.

 Pensioners line up outside the main gate of the national bank of Greece this week to withdraw a maximum of 120 euros .
Pensioners line up outside the main gate of the national bank of Greece this week to withdraw a maximum of 120 euros .
Alain Frachon


PARIS — As the Greek sovereign debt crisis escalates further, one man found the right words earlier this week to describe the situation. "We are all responsible for this crisis," said Donald Tusk, the former Polish Prime Minister and current President of the European Council.

In seven years, the mighty European Union failed to resolve a relatively small problem. With 11 million inhabitants, Greece represents only 2.2 percent of the EU's population and 1.4 percent of its GDP. Relative to the total wealth of Europe, Athens' heavy debt burden of 322 billion euros ($355 billion) doesn't look that heavy at all.

Before Sunday, Europeans must make a choice between allowing Greece to exit the Eurozone or agreeing on an umpteenth bailout to avoid default: In other words, a leap into the unknown or a ruinous status quo. The collective refusal to face the reality of the situation was a monumental failure that led us to where we are today, facing a tragic choice. Every party to the negotiations is pathologically in denial.

In Greece, this madness takes many forms. First, the absurd insinuation that Greek democracy is superior to that of the other 18 Eurozone members, themselves called stale conservatives or even terrorists by the Syriza government.

Since Greece's entry into the European Community in 1981, it has received dozens of billions of euros from the rest of Europe, all in vain as the funds were swallowed by corruption. Greeks are still mired in a political and economic system that resembles a radical socialist version of the Russian oligarchy: a bloated state based on corruption and nepotism, unable to collect taxes despite maintaining enormous military expenditures.

Spiral of failure

But if you believe the words of Greek Prime Minister Alexis Tsipras, his country's troubles are primarily due to the malevolent stupidity of its creditors, including European institutions and the International Monetary Fund (IMF). In this view, it's a black-and-white world. Those opposing the creditors are the heroes: the fearless (and tie-less) radical leftists, modern Robin Hoods fighting a vast global plutocracy whose sole aim is to starve the Greek people. The path back to sanity lies in a healthy serving of self-criticism.

In reality, irresponsibility abounds on all sides. It was not the best decision in the first place to allow Greece — a country that wasn't ready for such a move — into a clumsily assembled Eurozone. Since at least 2004, Brussels turned a blind eye as Athens artificially touched up its books, purposefully overstating its tax revenues and GDP.

Greece's awful current economic state — five years of recession, GDP down to 2002 levels, soaring unemployment — is also due to the harsh prescription of austerity handed down by Berlin, which many economists agree was an inadequate solution that failed to tackle any of the underlying structural problems. The policies imposed seemed as much an effort at state-building as at financial assistance, recalling the World Bank more than the IMF.

The most recent cycle of failure began in January, when Syriza's election victory suddenly made a "Grexit" much likelier than ever before. "Everyone has known since the 19th century that Greece is dysfunctional. But since its admission into the bloc, the EU has done nothing to modernize it," says Robert Dujarric, a Franco-American political scientist. "Abandoning Greece now would be akin to a couple adopting a handicapped child and then tossing it away like a used battery."

Hans Stark, a political scientist at the French Institute for International Relations, says that "in the moral sphere," Germany would suffer major damage from a Grexit. "Germany would be blamed for failing to foresee a divorce between the peoples, public opinions and governments of northern and southern Europe," Stark explains. "They would be accused of never even wanting to stop it, for fear of displeasing their own electorate and political class."

Defeat for all

A Grexit would entail colossal political and strategic costs. In the first few years, even if the transition was managed and aided by the EU, a return to the old Greek currency, the drachma, would produce an even harsher recession and social crisis in Greece. The country's collapse into default could transform the country into a Tsipras-style version of Venezuela under Hugo Chavez. The EU could be faced with a failed state at the heart of Europe, on the front lines of an escalating migration crisis and neighboring the unstable Balkans. The prospect is all the more terrifying as it comes during a time of heightened tensions with Russia and the rampant expansion of ISIS in the nearby Middle East.

As the European project loses steam, a Grexit could have unimaginable consequences on the rise of eurosceptic parties across the continent. It could provide decisive momentum for those in the United Kingdom campaigning to leave the EU. Could we be at the doors of Grexit in 2016 and Brexit in 2017?

Everything has a price, be it a "managed exit" from the euro (if it even exists) or a third bailout program for Greece. In the words of Guntram B. Wolff, director of the Bruegel Institute: "This is an enormous collective defeat for the Eurozone." Whatever price is ultimately paid, everyone is to blame.

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Putin's "Pig-Like" Latvia Threat Is A Chilling Reminder Of What's At Stake In Ukraine

In the Ukraine war, Russia's military spending is as high as ever. Now the West is alarmed because the Kremlin leader is indirectly hinting at a possible attack on Latvia, a NATO member. It is a reminder of a growing danger to Europe.

Photo of Russian President Vladimir Putin

Russian President Vladimir Putin

Pavel Lokshin


BERLIN — Russian President Vladimir Putin sometimes chooses downright bizarre occasions to launch his threats against the West. It was at Monday's meeting of the Russian Human Rights Council, where Putin expressed a new, deep concern. It was not of course about the human rights of the thousands of political prisoners in his own country, but about the Russian population living in neighboring Latvia, which happens to be a NATO member, having to take language tests.

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