In Turkey Kemal Ataturk modernised the country when the Ottoman empire fell. The Greeks, who were ruled by the Ottomans for centuries, never had such a leader. Like the Ottomans they have had bloated bureaucracies and endemic corruption since liberation (we are talking Lord Byron here!). Under the empire you avoided paying tax to the oppressor if you could, and many continue this ancient local custom. Greece was accepted into the EU owing to rigged statistics prepared by a very large bank, whose fees for doing so must have been, shall we say, large. That Greece was ever accepted into the EU was down to a starry-eyed idea of Greece being the mother of democracy – two thousand, three hundred years ago. Numerous barbarian invasions later, Greek thought has survived, but democracy long ago flickered and died with the desire for a Greek empire and a stupid war in Sicily. Add time, Alexander the Great and the Romans and democracy was history.

Meanwhile, the whole idea of the Euro was never viable, and most economists knew it at the time. It was a political decision. In an economic area such as the EU, with large, industrial economies like Germany, small countries like Greece and Portugal, dependent on tourism and with little industry, were always going to suffer under an overvalued exchange rate, without being able to devalue to make their economies viable.

What is actually happening here is that countries other than that of Germany have been doing rather badly since the introduction of the euro. Finland and Italy are two obvious examples (stagnation rules). In Spain and Portugal it has been a disaster. The idea of a united Europe is attractive (I support it myself), but once you strip out the desire for unity and no war and you take a hard look at the economics, this is what you see:

Germany makes huge profits from exports. This national surplus is fed through the German banks to banks as loans to, say, Greece. They do so so that Greeks can buy more German goods. When the Greeks can’t repay the loans because they have no exports to speak of, and puny surpluses, if any, the system descends on them like a ton of bricks. This German system will do the same thing to any country that cannot pay for its loans and its German imports. The fact that Germans banks lent out of self-interest and are therefore implicated in the debacle as much as the Greeks is irrelevant to the neo-liberals in charge.

Years ago this used to be called “colonialism”.

Because this post is already a bit long, I will return to suggest an answer tomorrow.