THE SPINE MAY 7, 2010
Actually, the insolvency of Greece also made rough waves in America. Shortly before 3 p.m., the major stock indices (S & P, Dow and NASDAQ) were about to register 10% southwards. Not good news. And the fact they all ended the market day at roughly 3.5% down was only relatively good news, very relatively. This was not a good week for Wall Street.
Of course, it was a disastrous week for Greece, which, mirabili dictu, avoided default only because the professional Eurocrats in Brussels and in other boring cities where “Europe” is headquartered went into hysterics. “The end of the dream” was their lament. But it is an index of how remote the real popular politics of the European nations is from the casually continental elites that “rescue” was so unpopular.
The fact is that Europe is not one continent, and it certainly is nothing close to one country. Even the countries, other than Geece, now nearing default are not remotely similar in their economic base. Take the Iberian Peninsula, which has, after all, something of a common history binding the two countries that make it up. But Portugal is really a backward polity with a backward economy. Compared to Spain, it is in the 15th century without the explorer ships and international trade. Its population works at farming.
Spain, on the other hand, has an advanced industrial economy. But it also has burdened itself with legal and illegal Muslim immigrants who are not only changing the European character of the country but who do not, given the choice, prefer to work. But the migration is not limited to Maghreb Arabs and other Africans. Spain has also been a magnet for Englishmen, Irish, Eastern Europeans, and masses and masses from Latin America—a grand reversal of the trek going west to one coming back east. It is a socialist monarchy. But socialist with a self-satisfied wealthy class that, not quite like in Greece, also chooses not to pay taxes. Spanish debts are much larger then those of Greece.
But the social contract seems more resilient. We shall see whether it really is ... very soon.
It is Greece that is crumbling. The prosperous underpay their taxes by about $30 billion per annum. Given that the IMF and the Germans have laid out about $110 billion so that Athens doesn’t actually close up shop, you can see how much the thievery really amounts to. For the moment, Greece is still in the European Union. But we don’t know how long it will before it simply won’t qualify.