Europe's Greek Moment

It took German Chancellor Angela Merkel two long years to visit President Obama. She eventually arrived at the White House this June. After considerable pomp and ceremony, the two leaders sat down at the Oval Office for two hours to discuss the most pressing world affairs. After the meeting, their press secretaries surprised people by saying the leaders of the West's two most powerful nations had spent one hour and forty-five minutes on Greece (with the remaining fifteen minutes spent debating intervention in Libya).

Only once before has Greece managed such prominence in the minds of the Western elites. The month was December 1944; the occasion was the eruption of the Greek Civil War; and its significance was that it constituted the beginning of the Cold War, the Truman Doctrine, and all that flowed from it. Could the Greek debt crisis be for the post-2008 world what the Greek Civil War was to the postwar era? Perhaps. But if so, the reason will not be Greece's debt -- indeed it will not be anyone's debt.

Before examining the true origins of the crisis, it would be helpful to examine a more recent official visitation. On September 18, 2011, US Treasury Secretary Tim Geithner dropped in on European finance ministers' regular gathering to share some thoughts on how the bewildering euro crisis could be ended. Quite astonishingly, Geithner's sensible advice was rejected unceremoniously -- the Treasury Secretary received the diplomatic equivalent of his marching orders.

The Austrian finance minister, Maria Fikter, presumably summing up the predominant feeling among Europe's powers, declared her puzzlement that "even though the Americans have significantly worse fundamental data than the Eurozone... they tell us what we should do and when we make a suggestion... they say no straight away."

This statement reveals the deep ignorance in which European leaders are veiled. When they refer, for instance, to "fundamental data" comparatively worse in the United States, they are referring to the Eurozone's lower debt-to-GDP ratio. They believe that Europe's problem is a debt crisis which, courtesy of being less severe than the United States's, is unlikely to be cured by the remedies purveyed by a visiting US secretary.

Tragically, the euro crisis is as much of a debt crisis as the pain caused by a malignant tumor is a pain crisis. It is my contention that Europe's unraveling catastrophe is due to its leaders' grand failure to grasp the essence of the crisis they are trying, unsuccessfully, to face down. And as if this were not troubling enough, theirs is a keenly motivated grand failure.

Read the full article at Jacobin.