Jerusalem Post Editorial: Greek tragedy?

The European Union’s Greek tragedy all but invites hyperbole. Hence analysts outdo each other in scripting doomsday scenarios.

Greek Prime Minister Alexis Tsipras (photo credit: REUTERS)
Greek Prime Minister Alexis Tsipras
(photo credit: REUTERS)
The European Union’s Greek tragedy all but invites hyperbole. Hence analysts outdo each other in scripting doomsday scenarios. They may be right or they may be exaggerating.
It would serve Israelis well to recall that back in 1985 we were on the precipice of our own terrifying catastrophe, but managed to pull back and achieve greater economic security and prosperity than ever before. From what we can tell, Israel is now sitting pretty and in a better position than many Western economies.
The Greek economy – one of the EU’s smallest – is roughly the size of Israel’s. That, however, is where the comparison ends. Israel has steadily amassed impressive monetary reserves (despite military burdens that, proportionately at least, no EU country comes close to shouldering). Israel had opted for conservative financial management, which, much as publicity-hungry politicians have scorned it, has kept us relatively safe from the ravages that afflicted the global economy.
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Our healthy GDP and focus on hi-tech research and development have elicited envy worldwide.
Greece has behaved quite in the reverse. Its woes are primarily homemade, not the product of force majeure.
Greece borrowed irresponsibly and built up a national debt that inevitably raised suspicion that its financial leaders were either in self-denial or somehow counted on the European Union to pick up their tab. Moreover, the Greek economy, dependent on tourism and shipping, saw both these mainstays decline in recent years.
The sacrifices asked of the Greek people are not significantly more stringent than the edicts imposed on Israel’s population by the 1985 national unity government.
Israelis accepted the decrees willingly. The Greek government and populace are not likewise inclined.
But this is also a glaring European failure. The EU superstructure, in which national economies – often incompatible ones – are excessively interconnected, could not prevent one country with an oversized public sector from cooking its books to the collective’s detriment.
Germany, the EU’s powerhouse, faced a crucial conundrum. Should German taxpayers bail out the Greeks who work less, go on pension earlier and get proportionally higher annuities? However, other European dominoes may fall too. The entire euro zone may be terminally destabilized. There is, unfortunately, no facile formula for the EU’s greatest-ever predicament.
One thing is certain – nothing we took for granted thus far can be relied on. There are no fundamentals to count upon right now and that goes for Israel as well.
No matter how much we congratulate ourselves for the evident Israeli economic miracle, we must constantly remember that no state is an island, particularly not one with as many EU business ties as Israel has.
But most of all, Israelis must remember that there are no free lunches.
We are in the throes of generalized agitation for nebulous “social justice.” The catalog of demands is too all-encompassing for any government, of whichever political persuasion, to plausibly handle.
These demands are more populist than serious, pitting “the people” against “the elite.” They ballyhoo sweeping, often unrealistic sociopolitical system changes. Because these are so across-the-board, they promise something for everyone and thus superficially appeal to broad, unspecified segments of society.
Claiming to sound the undiluted voice of “average folks” versus oppressive and privileged classes can be intoxicating. Hence, some in our midst vociferously advocate that we spend more than we can afford – like Greece did.
All too many politicians lack the backbone to resist populist demagoguery. Yet when they throw caution to the wind, they drag us all to the slippery slope of a Greek-like calamity.
Critical appraisal and supreme restraint are mandated of all of us – especially from the government, which despite its natural craving for popularity, must not give in to demands that are bound to unbalance the collective budget and leave us far worse off than we are.
It is not easy to stay fiscally responsible in the face of apparently genuine grassroots agitation. But if we do not make do with what we have, it will be easy to end up where Greece is.