During the Great Depression that began in 1929, several countries abandoned the gold standard (including the UK), while others, such as France, remained anchored to it. This led to a collapse of international trade, which amplified and prolonged the effects of the US crisis. The lesson we should have learned is that national responses to global crises are ineffective and can be highly destabilizing, and in the case in point were partially responsible for the climate that led to the outbreak of the disastrous Second World War.
Nevertheless, the scenes and statements that have been tumbling forth during the negotiations over yet another Greek bailout seem to prove that history tends to repeat itself with impressive regularity.
We dedicated our previous cover to the irresponsibility of the Greek leadership, but I think it useful to reflect upon what a Greek economist friend told me during those difficult days in July: “Not a single European institution explained to us Greeks what sacrifices we would have to endure, for how long and how our prospects might change”. He added sarcastically, “If someone had told us, we would have voted ‘yes’ on that bizarre referendum”.
His observation puts the finger on the reason for the current European malaise! Jean-Claude Juncker should be leading the charge in these complex matters, not Angela Merkel (how can she fail to understand that as she strives to maintain internal consensus her country is approaching a level of global unpopularity unseen since the end of WWII?). The EU president should be at the helm, not national leaders, if we want to avoid public opinion in different countries, and even their leaders, being at odds. I found it highly appropriate that the latest Greek deal should be announced by European Council President Donald Tusk and not François Hollande or David Cameron.
In the ensuing days, we then witnessed an unprecedented media offensive by Juncker and company. They tried to explain to us why it is ridiculous to speak of a nation’s humiliation after having coughed up nearly €300 billion (to date, Italians have contributed around €700 each) to enable the Greeks to start rebuilding a country without corruption and cronyism, with a sustainable economy where at least half the citizens pay tax and wealth is distributed with greater fairness, a benefit even for the muchtalked- about Greek pensioners.
And the hope is we won’t have to shed more tears over graver, more painful divisions.