Twilight of the Euro Welfare State?
It’s not from charitable impulse that Germany is reluctant to let Greece leave the common currency.
Journalists have strained to apply their good guy-bad guy conventions to the Greek crisis. But are the bad guys the greedy, wastrel Greeks? Or are the bad guys the imperious, demanding Germans?
In fact, this narrative is a poor construction. What we’re seeing is less a story of good guy-bad guy than a terminal falling out among Europe’s club of welfare states over the inevitable problem that eventually other people’s money (in Margaret Thatcher’s phrase) runs out.
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The Greek combination of welfarism-plus-cronyism, with a large helping of outright corruption, has long relied on other people’s money from abroad to make ends meet. But if the terms imposed by fellow Europeans for fresh loans-cum-aid have lately seemed intolerable to Greek voters, they still took the availability of fresh loans for granted. This week they are learning their right to their neighbors’ money is not automatic after all—and yet, for reasons we’ll get to, don’t be surprised if there’s an 11th-hour bailout.
