– It’s not only Greeks who’ve lost their marbles (Telegraph, June 26, 2011):
The essence of ancient Greek tragedy is that the audience knows it will end in disaster, but feels compelled to watch the horror unfold. And so it is with the modern version, a sovereign debt crisis of Sophoclean dimensions. Themes of the great dramatist’s finer works are all there: how arrogance, pride and deception result in unbearable pain; the inevitability of retribution and (not yet witnessed in Athens or Brussels) the arrival of wisdom through suffering.
Tomorrow, Greek MPs are scheduled to vote on a fresh austerity package. If it’s passed, the country will receive the next 12 billion euros of a 110 billion euro bail-out. Sadly, this is little more than a financial hors d’oeuvre. Still required is an additional 100 billion euro deal if Greece is to remain solvent until 2013. In effect, the country is borrowing enormous sums to service existing debts, which it cannot afford to repay. As Sophocles reminds us, when divine and human purposes conflict, the gods will always prevail. In this case, Athena, the deity of endeavour and reason, is deeply offended by Olympian self-indulgence. The upshot will not be a miraculous economic recovery, but a spectacular flame-out. As far as Greece is concerned, there is no deus ex machina. The tragic denouement will involve its default or withdrawal from the single currency, perhaps both.
Greece is bust; it already owes 160 per cent of its GDP. Its economy is staggeringly inefficient. Many in the public sector enjoy retirement at 50 and pensions close to full final salary. The private sector is blighted by corruption. The tax-collecting system operates on the basis of a tips box, with only 5,000 Greeks admitting to an income of more than 100,000 euros. When in January 2001 the country flagged its intention to ditch the drachma for the euro, the then prime minister, Costas Simitis, promised: “Our inclusion [in the eurozone] ensures for us greater stability and opens up new horizons”. That was the comedy.