Pending approvals, Greece finally has the bridge loan it has been seeking since March. But instead of the €7 billion Greece needed then, for perhaps as little as one year, the new loan is €86 billion for three years. The €79 billion difference and two extra years reflect the damage done to the economy in Greece by the delay. The national economy went, in three short months, from an even-keel recovery to depression-level functioning in which it was briefly dependent on international food aid. For the eurozone, the delay not only means a higher funding level for Greece right now, but also means it will take three to five extra years of work before the eurozone can be considered stable again, including an increased risk that that task can never be accomplished.
This is not merely a lesson in taking action when the time comes, though. The core eurozone countries have privately profited from the problems in Greece. They have swept up much of the money flowing out of Greece. The German government alone is estimated to have saved €100 billion in interest payments already from the flight-to-safety effect, with private borrowers in Germany saving considerably more than that. Employers across the euro zone have been able to hire skilled workers away from Greece at salaries considerably lower than the free market would have allowed. It is a case of, if not actually manufacturing a crisis, at least prolonging it so that the rich can get richer while the poor get poorer. When naysayers claim that the eurozone is being managed like an empire, this is the kind of effect they are talking about.
Of course, we have seen the same principle in action elsewhere. The mostly manufactured sense of crisis since 2007 in the United States has been hugely beneficial to Wall Street banking, the Detroit automakers, and the fossil fuel sector. In the last case, now that the crisis is fading, coal and oil companies are showing that they may not survive without the chaos windfalls they’ve enjoyed in recent years. More broadly, wherever you see state capitalism, you will find crisis upon crisis as the most well-funded business interests rush to position themselves to profit from the confusion and suffering of everyone else.
