Observer
November 6, 2011
While promoting his book Back from the Brink, former chancellor Alistair Darling has found that audiences are far more interested in the financial crisis than in politics. Yet the politics of recent decades have been an important factor behind the development of the crisis, and, although things do not seem to be going too well at the moment, will be crucial to the resolution of both the crisis in the eurozone and the broader world financial and economic crises.
It has become blindingly obvious to almost everyone that it was a poor political decision to allow Greece to join the eurozone. The European Union? That was fine, as it was for Spain and Portugal too. The EU is generally regarded as having been vital for the Iberian peninsula's recovery from the fascist dictatorships that prevailed there for decades after the second world war. There were also postwar dictators in Greece: any younger readers who are unaware of the military dictatorship of the colonels could do worse than watch Costa Gavras's 1969 film Z on DVD.
Sentimentality about Greece triumphed over rational economics when it came to the country's membership of the eurozone. Other leaders felt that "the fount of democracy" could not be excluded. Ancient Greece gave us the words "democracy" and "economics". George Papandreou's call for a referendum last week brought echoes of the way the ancient kings would assemble the populace in the agora (marketplace) to, in the words of the historian JB Bury, "hear and acclaim what he and his councillors proposed. To hear and acclaim, but not to propose themselves". Unfortunately for Mr Papandreou, his cabinet, the modern equivalent of the king's councillors, were not of the same mind.
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