Aiding and abetting our own demise

The old Roman advice to beware Greeks bearing gifts would probably run you onto the shoals of political correctness today. But doesn't this giant EU bailout for Greece call to anyone's minds that big wooden horse outside the gates of Troy?

There's actually a B horror flick quality to the scene in the Odyssey where the Greeks have been besieging Troy for 10 years and then one day they've all gone away and there's this big wooden horse and the Trojans don't suspect anything.

But then, isn't this Greek bailout thing one of those news stories that should have you barring the gates and doubling the guard on the walls before you're even done with the headline?

Or imagine you're there on the couch after midnight and Jim Flaherty solemnly assures people this rescue plan is "comprehensive and credible." The hair on your neck should already be rising as you anticipate, correctly, that the article will go on to tell you "Details remain elusive as to how the $1-trillion U.S. scheme will eventually unfold." Then politicians promise prudent and responsible reforms as soon as we've done this absolutely stupid and reckless thing with a dollar sign then a one followed by 12 zeros and newspapers describe how maybe the EU will enforce its own fiscal rules for real, this time for sure, or centralize power in a real functioning federal government.

If this were a B movie the audience would all be shouting "No, no, the elite is sneaking up behind you" at the hapless dopes on the screen. Thus Gordon Brown's crumbling, repudiated Labour government just put taxpayers on the hook for "at least £13 billion of debt held by other European governments" in the giant euro bailout and, the Daily Telegraph reported Monday, they "had no choice but to surrender because the decision was taken under a Lisbon Treaty 'exceptional occurrences' clause that stripped Britain of its veto." In theory Britain ducked an even larger £624 billion package, but if you believe that I have a big wooden horse for you that surely doesn't contain any Greek warriors.

The New York Times credited Barack Obama with tricking the German Chancellor into going along with this incredibly big, expensive, reckless and complicated fiscal schmozzle. Which is something the Americans have some experience with after their housing market meltdown and then their stimulus package and $1.4 trillion federal deficit. If there were two horses out there I'd suggest the Americans had put the second one in place, knowing their own public finances are in such a colossal mess that they need the EU in financial flames to make sure nobody has anywhere to flee from the U.S. dollar. More probably Obama is a dupe rather than a conspirator. But again, if European voters don't like it, they can't vote him out of office. I'll tell you one thing that's not in this horse: democratic accountability.

Do you think that any of these central bankers and finance ministers assuring us rubes that top men have worked it all out would wheel this horsie into their own homes? Would they put 10 bucks of their own at risk here? Hoo hah. But they're happily pulling it into the Treasury because they'll be home in bed when it goes up in flames. One Citizen story reported that "Markets have run wild since a debt crisis triggered in Greece spread to euro neighbours including Portugal, Spain and Italy -- with speculators accused of running for cover from euro currency and bond markets." Hey you speculators, wait for me. No, wait, I forgot, taxpayers can't run for cover. Politicians won't let us.

In Germany, voters actually punished the pseudo-conservative ruling Christian Democrats for making a sacrificial offering of £19 billion at the horse; in regional elections on Sunday they deprived Chancellor Angela Merkel's party of its majority in the upper house. But the result, the Daily Telegraph reports, is hardly encouraging: "The election defeat means the German Chancellor has lost control of the legislative process, allowing Social Democrats and Greens to block reforms aimed at cutting Germany's high public spending."

This apparently perverse result actually makes sense. A German government that doesn't even think Greece really ought to cut down a little is clearly not ready to reform its own spending.

In that sense this crisis is not the Greeks' fault at all. They're just playing the same game as everyone else, with less shame and less skill but to general applause. That's why they ran out of pretend money first and rolled a big horse up to the walls of central banks, insisting it has that special air of solemn responsibility that will convince everyone there's no danger. But why did they get so much help building it from inside the city?

Not even the Trojans were that dumb.

[First published in the Ottawa Citizen]

ColumnsJohn Robson