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.
The Greeks know it. Reuters cited a Greek poll, taken in early June, which found 78 percent of the Greek people "accept the view that many or all in government are corrupt." FoxBusiness.com reported Greece's finance ministry "has discovered rampant tax evasion and corruption, including bribery, in its own tax collection offices." The finance ministry is investigating "70 government officials who make about $62,000 on average a year, but own anywhere from $982,000 to $3.7 million in real estate." Greek tax evaders cost the country $27 billion a year. Last month, the EU and IMF loaned Greece $120 billion. You do the math.
Greeks working in internationally linked businesses, like tourism, face the consequences of this corruption. Earth Times quoted a guesthouse owner on the island of Ikaria as hoping "the firm focus of international attention" may help Greece "combat its homegrown corruption and government waste."
That's an anecdote from a businesswoman in the fiscal trenches. Ikaria is where the mythical Icarus' body washed ashore. With wings of wax and feather, Icaurus and his father, Daedulus, escaped from Crete, but Icaurus, despite dad's warning, flew too close to the sun and his wings melted. Icaurus didn't lie, but he lacked discipline -- thought he could do his own thing. He plunged into the sea. Hotel operators understand the myth's 21st century relevance.
The big idea driving the euro and the European Union was political -- to create a larger common interest based on linked economies. Perhaps growing common interests would ultimately forge a common identity, or enough of one to end Europe's destructive wars, especially those pitting France against Germany.
That is still a very good idea, which is why a European "common market" makes sense. Honest trade builds bridges. A common currency union, however, which lets crooks in Athens pick the pockets of a French farmer or German brewer, seeds conflict.
The D-marks and francs in the souvenir box may have a future.
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