September 21, 2015 was the first day in power for the New Government of Greece, but the Greece crisis, latest news and updates are not fully understood by travelers and foreigners.
Whether you want to visit Greece, whether you are Greek or whether you just want to learn more about what happened to the economy in Greece and why, here is an overview of how the European Community set poor countries like Greece up to fail.
What is the European Community?
The small country of Greece is a weaker party of the European Union for several reasons.
To understand why, first it’s important to understand the European Community.
Before WWII the European powers dominated the world. After WWII the political situation shifted and the most powerful nations became the USA and Russia, both federations with huge territories.
Europeans understood that the only way to be powerful again would be to be unite, and so the European Community was created.
The idea was to create a common market that little by littlie would evolve into a sort of multilingual and multicultural Federation.
This was a great idea, and could even become a model for countries in other continents, but unfortunately things did not work out as intended.
Common Currency in Europe
At a certain point the decision was made to share the same currency.
This was a very strange idea, and had never happened before in human history. Needless to say it was a disaster.
The idea of using a common currency across Europe makes no sense.
A country collects money from taxes and with that money the first thing to do is secures its limits, covering military and defense expenses , then the country takes care of its people’s benefits.
If the expenses are larger than the income (generated from taxes) then the value of the money of a country goes down.
This is how the value of money has been determined, with all countries, from the beginning of currency.
The issue with the European federation of today is that each country is responsible for their own military and must pay to secure their own limits. When sharing a common currency that is very strong and cannot go down, this can be a problem.
To illustrate the point, take the USA for example.
The USA is a big federation with a strong economy.
All the states of the USA share the military expenses and share the same currency.
What’s happening today in Europe is as if all the states of the USA were to share the same currency but had to take care of their own military expenses and had to have military to defend the borders of each state from the neighboring states.
That would be an absolute economic catastrophe, and that’s exactly what happened in Europe.
This idea of common currency without political/military union was catastrophic for the countries with weaker economies, including Greece.
All the poor countries of Europe were affected, Spain, Portugal, Ireland, Italy and Greece, while the richer countries of the European North took advantage of the situation. One could even question whether this was part of the motivation to use common currency without common military and defense, to absorb the weaker countries.
What happened was nationalism came back stronger and hate between the different European nations developed.
The original idea of the European Community was to break the national limits and make all the people in Europe share the same identity, to be “Inter –Europeans.” This could have happened if there was a political union first, then a monetary union, but having the monetary union before the political union destroyed weaker economies.
The entire European project could be expressed metaphorically as an architect that tries to build a house starting from the roof. The Europeans should have unified politically and organized a common defense system then build a common currency.
As a result, Greece, once the most powerful empires of the ancient world, went bankrupt.
To understand how this happened, and why Greece was so vulnerable after the European Community was created, read part two of this series, “News of Greece : War and Oil” and part three, “Latest News About Greece Government and Economy.”