When I was a schoolboy many years ago our classics master started every young student on his path to understanding ancient Greek culture by stating that the two key characteristics of that society were its adherence to the principles of sophrosyne and dikaiaosyne. Attempting to order their political and social systems to conform to these two principles was what made a rude Attic society rise to become an intellectual and spiritual beacon for the world.
Sophrosyne is a Greek word whose meaning encompasses temperance, moderation, self-control and soundness of the mind. Sophrosyne was a Greek goddess who was released when Pandora opened her box. Her Roman goddess equivalents were Continetia, the goddess of continence and moderations, and Sobrietas, the goddess of temperance and sobriety. Living within the orio sophrosyne (the boundaries of temperance) was described by Aristotle and Plato as describing a life without excess – a harmonious and balanced life.
Dikaiaosyne is noun who can be translated as ‘justice’ or ‘righteousness’. It represents the state in which a man lives by integrity, virtue, purity and righteousness; with a correctness of thinking and feeling which makes him worthy of the admiration of the gods and his fellow men. He eschews personal advantage but seeks justice for all.
These two cardinal virtues which underpinned classical Greek culture are almost completely missing from modern Greece. It is the absence of these virtues and ideals by the leaders of modern Greece which has led to the sorry state of the nation. The transmogrification of these ideals had led to a long and uncomfortable period of decline and misery for the Greek people. The venality and corruption which characterises the modern Greek political system and structure was the principal cause of Greek decline; not the ham-fisted intrusions by the European Union.
Only one of the ancient Greek traditions seems to have survived the process of Greek modernisation unchanged. In classical Athenian society a free-born Greek with the right to vote was known as an ‘idiot’. That tradition hasn’t died. Over a long period of time Greek idiots have voted back into power a succession of governments which have failed to address the needs of the Greek nation. Choosing between PASOK and New Democracy in consecutive elections required a strong stomach, a weak nose and a flexible spine. The political dynasties of the various Papandreous and Karamanlis have led Greece to ruin.
Now the Greek Parliament has passed a new budget which locks in further austerity and reduces even further the pitiful standard of living of the average Greek. The problem is not, as the Eurozone gauleiters would have it, that Greece needs discipline and authority. The root problem of all these policies is that there is no money, no hope of growth and only a future of despair and decline.
The ruling elite in Athens face growing difficulties imposing the cuts being dictated by the EU. The austerity measures introduced so far have already led to a deep recession, unemployment of over 24 per cent, and a massive drop in wages. Since the beginning of the crisis, 70,000 businesses have had to close. The government now plans further cuts in wages and pensions of up to 30 per cent, cutting unemployment benefits in certain areas and imposing mass sackings. At the universities, 13,000 to 15,000 non-tenured lecturers’ posts are to be cut, and the already desperately underfunded hospitals must cut a further 10 per cent of their workforce. There will be expanded tax collection but no one knows from whom this tax will be collected.
The notional money that Europe will be injecting into Greece if they feel that these austerity measures are acceptable will not go to Greece. It will go to Greece’s creditors. The whole interaction between the European institutions and Greece is not a bailout of Greece; it is the turning of private debt of German and French banks owed by Greece into a public debt owed to these banks by the European taxpayer. The last €130 billion “bailout” showed that clearly. That €130 billion package did not benefit the Greek budget, and certainly not the Greek population. Rather, it went directly into the coffers of private financial institutions. Thirty-five billion euros were earmarked as a “sweetener” to induce international creditors to accept the haircut, €23 billion went to rescue Greek private banks from obligations to European banks, and €35 billion was allocated in guarantees to the European Central Bank so that it could to provide Greek banks with liquidity. The Greeks received notional money. Its debts towards private and institutional European banks were diminished by the Europeans using EU taxpayer money to pay off the European private banks and calling that a “bailout” of Greece.
This is cloud cuckoo land economics. The European Union banking institutions have only the money available that the national banks of the twenty-seven nations have made available to them. This money is not transferred to the ECB or other institutions. It is pledged by the very nations who have virtually, including Germany, no real ability to actually pay the money over. The ECB and similar institutions notionally transfer these funds to Greece by ticking off some of the loans outstanding by the Greeks towards their own and European banks. They use fantasy money to pay notional debts. No money actually changes hands but the private banks now have shifted their debt portfolio from Greek debt to the European taxpayer who will eventually have to come up with the cash.
This is an elaborate version of the Three-Card Monte trick where one has to guess which of the three cards is the ace or which walnut shell hides the pea. It is not possible to win. In the meanwhile the Greek people have no money for consumption and even less for investment in anything productive that will generate cash. If there is no investment there will be no growth and this cycle of dependency will grow as the Greek political elite serve up ever more austerity to the Greek citizens. The only solution is bankruptcy. The Greek people, who are already suffering most from the cuts, will be the first to pay for the consequences of bankruptcy. Next, the financial losses will fall on the budgets of those states guaranteeing the EU loans to Greece. These governments will take the situation as an opportunity for further cost-cutting and austerity measures, so as to meet the strict requirements of the Fiscal Pact. It will be a spreading disaster throughout the Eurozone and the European Union as a whole.
Every fantasy comes to an end. Even the Grimms eventually called it a day. There are fewer people every day willing to put aside disbelief to listen to the European fairy tales. The European denouement will occur over the next budget when disagreement among the nation states will take over. After all, it is eighteen years in a row that the European Union budget has failed to be approved by the auditors. The Greeks are a long way from sophrosyne and dikaiaosyne. They are, however, getting closer to the period when hubris occurs (the opposite of sophrosyne). Then it will be the time of the Erinyes (the avengers), coming to punish those who have betrayed the Greek people.