Been eating cake too long

There is an old joke about what do you do if you don’t know anything about the country being discussed at a dinner party. You simply say: “Yes, but it’s different in the south.”

By Hds Greenway (World View)

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Published: Tue 18 May 2010, 9:41 PM

Last updated: Thu 2 Apr 2015, 10:27 AM

It works for almost any country whether it be Yemen, India, China or the United States. It’s certainly true of Great Britain, where if the Conservative swing in England had only been replicated in Scotland, the Conservatives might have had a clear majority in parliament without the need for coalition government. It works for regions, too. Think of the Americas, or Asia. It certainly works for the European Union, and for the eurozone — those 16 countries that have adopted the euro as their currency. Britain can be thankful to poor old Gordon Brown for having kept Britain out of the eurozone when former Prime Minister Tony Blair wanted in. Greece has become the bad boy of the zone for cheating and lying about its finances and living high off the hog for too long when it couldn’t afford it. The recent trillion-dollar bailout has things calmed down for the moment, but there are worries about the entire southern tier of Europe, with Spain, Portugal and even Italy should the Greek disease spread.

Ireland is another country where it’s different in the South, with the Republic only recently considered the up-and-coming place to invest compared to the troubled North. But today southern Ireland’s finances are in shambles too, joining Portugal, Greece, Italy and Spain to spell “PIIGS” in the taunting language of the richer European countries that are doing the bailing.

There are lots of theories why the southern countries of Europe are not as fiscally responsible as the northern tier. Some talk about the Protestant ethic and the hard northern forests compared to the softer climes south of the Alps. Others speak of the sparse, worn-out soil of the south compared with the better earth up north.

Still others speak of the historical shift of power and wealth from southern Europe northward around about the 17th century when Holland and Britain began to replace Spain and Portugal as the maritime powers of the world.

Take whatever theory you want, the stereotypes are coming to the fore as the thrifty, hard-working Germans complain bitterly about the feckless, fun-loving Greeks. Certainly it is hard to imagine Germans breaking plates at weddings. Greeks say it was an honour not to pay taxes in the times of Ottoman domination, but the Ottomans haven’t ruled in Greece for more than a century. Still, some historians like to blame the Ottoman past for the instability of the Balkan Peninsula. That won’t work for Spain and Portugal, unless you want to blame the Moors who were expelled in 1492, and the Ottomans never reached Italy, much less Ireland.

Britain’s debt is reaching Greek proportion, and the new Conservative-Liberal government is promising an austerity not seen in many decades. Will the British people accept it? We have seen Greeks reacting with violence to the austerity their government is trying to impose, and it is a real question whether, in democracies, you can force people to swallow the medicine they so desperately need.

Hard times produce social disruption, as Europeans know too well. And Europe has no stomach for deprivation. One remembers the French students who demonstrated in Paris a couple of years back against giving employers a right to fire them, and the New Yorker cartoon it produced showing placards saying “Let us eat the cake.”

The Western world has been eating cake for too long on both sides of the Atlantic. But Europe, with its treasured welfare-state indulgences, is going to find it hard to adjust to leaner times.

Financial Times columnist, Gideon Rachman, put it well when he wrote that he once thought that Europe had got it right. Let America be the military superpower, and China the economic superpower. “Europe would be the lifestyle super-power,” with the “most beautiful cities, the best food and wine, the richest cultural history, the longest holidays, the best football teams.” But now Europe is discovering that it really can’t afford to be the lifestyle superpower, and that “things can go badly wrong — even within the walled garden of the European Union.”

The first half of the 21st century may be remembered by historians as the time when it all went wrong. In retrospect, one could argue that the EU expanded too fast, accepted too many countries into the walled garden.

The eurozone has been a failure, especially for those countries that never had managed fiscal discipline. But now the ship is taking on water and all aboard her have little choice other than to keep bailing.

HDS Greenway is a distinguished US-based commentator and columnist

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