Guardian
May 20, 2012
Like a marriage in its last throes, the euro appears to be falling apart before our eyes. But does it really have to happen? It's worth remembering that the eurozone as a whole is in trade balance – it's comfortably solvent, so that settling of accounts could resolve the problem without any financing from the IMF or China. But any solution to the eurozone crisis will need to involve rejecting narratives of resentment and betrayal that can lead parties to inflict terrible damage on each other.
At the moment, the architects of the euro project still find it hard to forgive being hostage to Greece, whose economy is no larger than the state of Hesse. But the damage of a Greek exit will be out of all proportion to its size, as other dominoes totter, damaging confidence and trade even if they don't fall. It's the mark of a truly dysfunctional relationship when resentment at being threatened with break-up is the main reason no one will compromise to stop it happening.
Any therapist knows that saving a marriage has to start with abandoning stories of one-sided blame. In an economic union, nowhere is this more important than when creditors and debtors blame each other. Yes, the Greek government has been spectacularly spendthrift. From when it joined the euro at the beginning of 2001 until reality began to sink in at the end of 2009, Greece was the world's fourth largest arms importer, buying 70% more than Israel over that period.
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