Here in Ireland, the sun sets late – about two hours later than it does in the US. And it rises earlier, as well, especially at the solstice. But it’s this mid-summer night that will seem long. Wimbledon aside, it is tonight’s vote of confidence in the Greek parliament that has European eyes fixed on the news channels. If Prime Minister Papandreou loses the vote, Greece may well be headed toward an inevitable default on its massive debts, and the European Union has based its offer of a second bailout on the stern austerity budget and increased taxes that are the burr under the saddle of popular resistance in Athens and elsewhere.
Should Greece default, economists are wary that Spain, Portugal, and Ireland will head in the same direction as the monetary house of euro-cards begins to totter. France, Germany, and England will be adversely affected as well, despite some evident whistling in the dark.
The back-story is worth exploring. Volumes will be written about it in years to come. For now, the simplest explanation gets down to a familiar refrain: irresponsible financial policies, dodgy bank loans, lack of regulation, and a massive failure of accountability. Call it “2008, the Sequel.”
As the cost of living goes up and the standard of living goes down here in Ireland as elsewhere, it’s difficult to resist citing an ancient adage that sophisticated financiers (and politicians) might well consider: “the love of money is the root of all evils; it is through this craving that some have wandered away from the faith and pierced their hearts with many pangs” [1 Timothy 6:10].
If that seems naïve, here’s another more homely version: there’s no such thing as a free lunch.