Austin Bay

Colossal sovereign debts owed by member nations may yet shatter the eurozone. The political effects of a euro-breakup are uncertain, though Greece may be serving as an unfortunate indicator of what a small state can expect in terms of troubling future history if the world's fragile economic circumstances deteriorate.

Greece has witnessed a loss of faith in government and its leaders, leaving state institutions that much weaker. After it announced austerity measures to facilitate debt payment, popular rage forced Greece's former government to resign. Its caretaker government begs for domestic cooperation and international help. Yet local turmoil continues, to include terrorist threats in the name of economic justice and national identity. This anger seeds an ugly intra-European war waged with inflammatory words. Germans are called Nazis, of course, but now the French are also slandered as greedy imperialists. Have-nots in Europe's debt-burdened south reproach the haves (who loaned them money) in Europe's debt-wary north.

Greece's shrinking economy has, logically, led to defense budget cuts. The Greek Navy's squadron of German Type 219 submarines is, if not sunk, beached in payment disputes. According to StrategyPage.com, the army may eliminate several brigades. The government, however, does not want to cut back on the regular force's personnel strength because that would increase unemployment. Meanwhile, Greece's traditional foe, Turkey, is buying Type 219s. Despite being NATO allies, military competition with Turkey has shaped Greek defense budgets. Greece can no longer afford it.

Defense, of course, is only one element of national security. Besides, Muslim Turkey won't bait Christian Greece, will it? Well, the brewing confrontation over natural gas in Cypriot waters, with Turkish Navy ships shadowing oil exploration vessels, may argue otherwise. Turkey wants the division of Cyprus (a frozen war) resolved before gas production starts.

In 2012, Greece is, as stipulated, a small state. If it leaves the euro-zone, Europe's big economies will adjust. If frictions develop over Cyprus, the U.S. would defuse Greco-Turk tensions. That's the betting line.

In 1912, however, Balkan resentments ignited the First Balkan War. World War I followed in 1914. Europe's Great Powers failed to adjust.

So what happens if the current doldrums get worse, producing a deep, prolonged global depression? The Greek model indicates governments weaken and angry populations get angrier. Desperation creates a political market for the hucksters who peddle quick and easy solutions. When Greece first experienced trouble three years ago, Greek leftists crowed that the time for the workers revolt had finally come, never mind communism's systemic disaster.

Small groups of radicals, whatever their agenda, can use media to magnify their strength. Nazis did that in the early 1930s. Today, international coordination of demonstrations simply requires cell phones. Exploitation of ethnic, nationalist, religious and economic resentments requires a YouTube video.

States facing anarchic stress are not only candidates for debt default, but coups and civil war. Rash dictators or jingoist parties, seeking domestic support, may unfreeze a frozen war.

What a future -- a powder keg mosaic of destructive little wars, some potentially nuclear. What prevents global conflagration? The same buffer that, for the moment, dampens passions over Cyprus: American power and prestige.

The global buffer, however, is, well, less buff. America faces its own crisis made of mounting debt. Defense budget cuts, to include cuts in personnel and major weapons, are certain. A deep depression would further erode U.S. economic, diplomatic and military power. At the moment, U.S. power guarantees the global trading system; threats to international trade might increase (more pirates), increasing trading costs. No one in Asia, including Russia, wants China to fill the vacuum, even supposing a depression-vexed China (remember, it's worldwide) had the power to act globally. Regional action by China (Taiwan? Vietnam?) and other regional powers, to include India ("solving" Pakistan?) becomes more probable.

Despite their own economic challenges, shrinking U.S. defense budgets could lead to some regional power defense spending as the "free ride" on Uncle Sam's military ends. It will be a seller's market for fast patrol boats, armed drones and former special operations soldiers capable of training a commando brigade.


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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