The wonder of the Greek implosion was not that it came so soon, but rather — given the pan-European phenomena of early retirement, declining populations, bloated public sectors, and militant unionism — that it took so long.
In some sense, the dream of the European Union — a continental democratic socialism that offered a Western liberal antithesis to the United States — is now finished. Let us count the reasons why.
1. EU expansion has probably ended. The irony is that wannabe members like Turkey will now probably be relieved rather than envious and bitter at being excluded. At worst, a chronically broke Turkey can cook its books and devalue its currency as it wishes, without international lenders assuming de facto control of its government, as in the case of Greece. In the next few years, we will not hear discussions about expanded EU membership; rather, we will hear debates about members’ voluntary or forced withdrawals. At best, the entire unworkable scheme will devolve to its original idea of a few Western European nations’ agreeing to loosely integrate their economies, and to adopt a common foreign policy within the NATO alliance.
2. So the pan-European commonality is unraveling. What is striking about the German-Greek fight is not that frugal lenders would be angered at profligate borrowers, or even that the envious, weaker client would resent the more powerful and haughty patron, but just how quickly the memories of 1939 rippled through the continent, as the thin veneer of European socialist brotherhood was torn away. The German and Greek presses almost immediately were refighting World War II — Greeks demanded more wartime reparations and the return of their supposedly stolen “gold”; Germans were willing to take in exchange uninhabited but picturesque Greek islands. The old European fear of a strong, alienated, and angry Germany resurfaced, along with the old stereotypes about sun-loving, irresponsible (and lazy) Mediterraneans in need of handouts from hardworking and sober (but cold and ruthless) northerners.