Austin Bay

In a box in a drawer, I've a dozen Deutsche marks, a few French and Belgian francs, Italian lira, Spanish pesetas, Greek drachmas, Turkish lira and British pence.

After the European Union adopted the euro as its official currency (January 1999), my traveler's spare change collection -- excepting the Turk and Brit coinage -- eventually became numismatic souvenirs.

The conventional wisdom at the time pushed a narrative of inevitable Euro-progress. At some point, the Euro-zone (nations using euros) would expand, and the Turkish lira and the perfidious British pence, too, would disappear.

Now, however, the Euro-zone faces a crisis catalyzed by the potential default of big spending, low productivity nations -- Greece, Spain and Italy, with Portugal and Ireland also in trouble.

Greece teeters on the edge. The Wall Street Journal's Paul Hannon wrote this week that "the failure of its (EU) systems for monitoring and controlling build-ups in government debt" are why the bailout loans given to Greece by the International Monetary Fund (IMF) and fiscally disciplined EU members like Germany became necessary.

He's right. "Failure of its systems for monitoring," however, is a euphemism -- economic diplo-speak for a very difficult word: corruption. Greek governments cooked the books (its actual deficit is twice as high as officially reported), violated fiscal agreements and borrowed money they could not repay.

Corruption lies at the dirty core of the Euro-zone's trouble. Governmental corruption and its cohort, illicit business practices, are a pervasive, multicultural, global affliction.

Corruption coupled with systemic lack of accountability -- to include personal accountability, where managers and workers let lackadaisical and lazy work practices slide -- eventually produces more than anger, cynicism and financial turmoil. Even among economies in the developed world, it stunts economic productivity, robs the future and sows the seeds of armed conflict. In the developing world it undermines aid efforts, manacles fragile economies and as a result condemns millions to poverty.

Transparency International (TI) ranks Greece and Romania as the most corrupt nations in Europe, tied for 71st internationally. TI also provides a stunning statistic: In 2008, 13 percent of Greek households paid a bribe. The Greeks call it "fakelakia" (little envelopes), but the money is huge, around $950 million to public and private bribe-takers.

Austin Bay

Austin Bay is the author of three novels. His third novel, The Wrong Side of Brightness, was published by Putnam/Jove in June 2003. He has also co-authored four non-fiction books, to include A Quick and Dirty Guide to War: Third Edition (with James Dunnigan, Morrow, 1996).
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