People make mistakes. You do, I do, and everyone does. When we make a mistake, we pay a price in terms of money, time, inconvenience; and frequently, health. When large groups of people make the same mistake, the results may be horrible to the group or even to the entire country which is the location of that group.
The people of Greece made a major mistake by joining with the other nations of Europe into a Common Market which uses a Common Currency.
In addition, the other countries of Europe made a major mistake by taking in Greece as an equal partner in their Common Market and allowing Greece to use its Common Currency.
This type of mistake is frequent amongst individuals and small groups. In Law it is known as a “Partnership.”
Whatever one Partner does is shared equally by all the other partners. If one partner earns money, all partners share in those earnings. Conversely, if one partner loses money, all the other partners must share in those losses.
Since this type of contractual relationship so often turns into a major quarrel between the partners, leading into legal fights which are costly and disadvantageous to all the partners, the corporation or “limited liability” partnership was formed, and most people opt for this form of company where partners are not a problem.
Yet when the European Union was formed this entire experience of the “weak partner” was ignored.
Not only did the people of Europe form a partnership with each other, they also decided to use a common currency.
A common currency is another form of partnership. As we are seeing so clearly today, a common currency means that all partners who use the common currency must be responsible for the debts of any of the partners.
The European nations are not peopled with morons. The people of Europe are the most educated people on this planet, with the exception of certain small countries. And yet, these educated people decided to form a partnership, thereby binding all economies into one; and, use a common currency which made all nations equal in terms of the value of this currency.
Why and how did educated, and, supposedly, intelligent, people, mismanage their affairs to such a degree?
In every group, whether large or small, there is always one or more greedy individuals who can outwit his neighbors.
These people are very clever. In the masterpiece of literature written by Johann Wolfgang von Goethe, called Doctor Faust, Goethe describes the way in which an educated doctor is tricked by the “Devil.”
GOETHE – WORLD’S SMARTEST MAN
Today, we don’t call a clever person a “Devil.” However, we can see, over and over, clever people finding ways in which they can profit, through using the public and its government.
In Europe, in spite of its educated population, its public voted for a partnership or union with each other. The people of Europe totally disregarded its history of war and dislike of its neighbors.
No longer than a century ago, the people of northern Europe felt that their neighbors in the south were lazy and unreliable. And yet, these very same people decided to join in a partnership with these “lazy and unreliable” people.
Of course, the clever people, or “devils” that operated banks and international businesses, convinced the public that they would be happier connected to each other. Their favorite argument was simple: “You won’t have to stop at the border.”
The fact that the hard working citizens would have to pay billions in new taxes was never mentioned. And, the people of Europe, ignored this obvious probability.
When the advent of the Euro came along, another simplistic argument by the bankers was introduced: “You won’t have foreign change in your pocket when you return from a trip.” This was enough of an argument for the majority of the people in Europe to choose the Euro instead of their own currency.
THE PRESENT PROBLEM
Today, we are seeing the “Greek Paradox”.
FAUST MAKING A PACT WITH THE DEVIL
Should the people of Europe pay off the debts of Greece and keep the Euro as their currency? If they do not pay off these debts, banks throughout Europe and some in the U.S. will lose billions in worthless bonds.
In addition, the Euro will lose a large part of its value. The economy of Europe will drop into a recession. Even the strong northern countries will be weakened.
However, if they do pay the debts, Greece and other weak countries will not get stronger. They will remain weak and incur more debt.
Who will pay the new debt? Is a partnership of countries a good idea?
If it were the “Limited Liability” form of contract would never have come into being.