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I'm finding it hard to figure how the EU can help, in a positive sense, as most of the problems you list are inherent in the Greek polity/economy.  I appreciate your resentment at popular media continually referring to Greece and Greeks as if they were some kind of homogeneous community, but Greek inequality, inequity, corruption, inefficiency and lack of transparent and honest business and political transactions are ultimately Greek issues.  After all it is Greece as a nation which is a member of the EU, and Greek citizens are only EU citizens in a very secondary sense - even after Lisbon.

It is also understandable that German citizens (say) should be reluctant to underwrite "Greek Bail-outs" in the absence of structural reforms of the issues you list.

Where I am in agreement with you - and in radical disagreement with the MSM - is in my analysis of what those reforms should be.  As you and others have noted, further austerity measures can result in ever increasing deflation and thus make the problem even worse. The solution, as far as I can see, has to be on the productivity side, and here the main barriers to progress are the things you mention: Corruption, Oligarchal control of the economy/polity, tax evasion, poor allocation of resources, under-investment in real productive assets etc.

Thus what Greece really needs is a social revolution - a radical modernisation of the productive base of the economy, a widening of the ownership of those means of production, an innovative approach to economic and social organisation, and an elimination of corruption, tax evasion, mis-allocation of public resources etc.

EU legislation on workers rights, human/political rights, transparency of contract allocation etc. can all help, but they still have to be implemented by Greeks.  Hence the social revolution - the overthrow of the old corrupt oligarchy.  We have had a similar - but apparently lesser - problem here in Ireland.  At least we do have a relatively vibrant and modern industrial/service industry/knowledge economy base.  The corruption was largely in the banking/building industry and related sectors.  Some regularity reforms are being carried out and I doubt the financial/building sector will ever be allowed to run amok again.

But the bottom line is that these are still largely problems for US to resolve.  The EU is at best a helpful external reference point and enabler - (and a bailer out on a short term basis).  I would personally favour greater fiscal/economic integration across the EU if only as a means of imposing higher standards across the board - particularly for health care, workers rights, capital controls, education, building standards, banking regulation, auditing of public accounts, energy policy and provision, environment and climate change etc.  But current EU Treaties don't take you very far in that direction, and expect Nationalists in other EU countries to resist all further integration - and not just in the UK, but perhaps increasingly Germany as well.

So whatever Merkel says about this being an existential crisis requiring greater EU integration, expect progress to be slow.  Most of the problems will have to be resolved by the Irish/Greeks/PIIGS themselves.  Don't borrow from international markets if you don't want them to rule your country...seems to be the long term lesson.  But that means you have to get rid of the corrupt elites who benefit from the global financial games in the first place.  What you say about patrons bribing their peons into complicity happens at the highest levels as well.  There really is no substitute for integrity and accountability at all personal and systemic levels.  An advancing polity/economy cannot progress without it.


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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri May 14th, 2010 at 06:55:01 AM EST

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