This business (there I go, right at the very start, with my second word of the day) of debts causing a horrifying chain of collapsing and collapsible governments, creating multi-national political chaos and turning the whole European continent into one massive jelly cake, has made amateur economists of each and everyone of us.
The Great San Andreas Fault that forms the tectonic boundary between the Northern do-gooders’ plate and the Southern no-hopers’ plate of the eurozone has been viciously strike-slipping far too close to home for anyone to ignore.
Just a few weeks ago, we had our own finance minister dishing out some reassuring words of expert advice to the media, saying Berlusconi’s Italy was neither a problem nor a major source of concern. Today Berlusconi is gone, while Italy trembles. And it seems to be catching, as France and other eurozone economies, as well as that of the UK, tremble uniformly with her.
Governments have been bailing out other governments willy-nilly, and in the process taxing the citizen to save the banker who had earlier hoodwinked the citizen by way of keeping his political masters happily in power and generally creating a situation where no one, including the politicians and their favourite economists, actually knew what was going to happen next. Passing the political buck has been the most effective tactic so far.
The situation reminds one of the old story of the train that came to a sudden stop. People started to look out of the windows and then, hurriedly dropped back into their seats when they saw that the cause of the stop was a hold-up.
The robbers came through the train ruthlessly stripping money, jewels and valuables from the passengers.
One man seemed to become more and more nervous as the bandits approached the seat where he sat with his friend. Finally, drawing a fifty-euro note from his pocket he leaned towards his friend and said, “Here, Franco. Here’s the fifty euros I owe you.”
All this is, of course, ripe for some brisk imagination. One can easily imagine Merkel and Sarkozy, acting like the stern mother and father of the eurozone family, actually giving good old George Papandreou, Silvio Berlusconi et al a severe telling-off, bluntly asking them how it was at all possible they could sleep at night, or enjoy any of the comforts of life, other than, in the latter’s case, the bunga bunga, when they thought about the immense debts their nations owed.
Their answer, very much in the same inspiring spirit of European fraternity, would be: “Dear mama and papa, you need not be in the least surprised. Your astonishment ought to be how our creditors can sleep.”
Where does all this leave us? Of course, the trouble with public debt is that private individuals have to pay for it. In our case, the government debt, not excluding the hidden segment, is so huge that the next generation, and the one after that and possibly the next one, will have to help pay it off, which probably explains why it is in the nature of the modern baby to yell so loudly at birth.
The current economic tragedy is the result of so many decades of financial hype. When listening to the banks and loan companies, which many sadly did, you’d almost believe you could borrow yourself out of debt, and now all that many people and nations have when the rainy days come, as they have done with a vengeance in the eurozone, are a lot more debts they ran up when the sun was shining or perceived to be shining. The realisation is that debt is like quicksand, and just about as hard to get out of.
Of course everybody agrees the huge national debt should be reduced and hopes some future generation will do it, let alone last Monday’s Gonzi Budget. It might seem hard to believe, but to the average person there was indeed a time when being over head and ears in debt was a catastrophe rather than an ordinary condition in life. As one wisecracker said the other day on learning the Maltese government is borrowing a further €100 million, “we had better go easy on piling up the national debt. With the life span steadily increasing, we may have to pay it ourselves.”
The sad reality is that future Maltese generations will be born free, equal and in debt. One could say blessed are the teenagers, for they shall inherit the national debt.
One can’t help wondering. Will the eurozone partners continue to stick together “till debt do us part”? With economists now taking over governments that have crumbled because of the arrogance and greed of their friends the bankers and so-called financial experts, you inevitably begin to do a reality check on yourself.
We all have families and most of us, at least, make sure we borrow within our limits. In any case, banks always make sure you don’t get anything if you cannot guarantee your own mother’s soul. But if we transpose the same thinking to governments and administrations, why did banks let them borrow far beyond their limits? What made them ignore the logical simile?
The reason must have been the potent attraction of personal enrichment and political power. Politicians need money to stay in power, particularly when they begin to feel they have lost their people’s trust.
So they go all grandiose overnight. They embark on major projects that hopefully please the eye but certainly hurt the national pocket. Hospitals are usually a very attractive proposition. They build parliaments when the old ones are good enough for the time being. They replace theatre ruins with roofless theatres. They start nationwide projects to impress the electorate. They blow big, monstrous bubbles, like a far-too-costly, new public transport system, which more often than not explode in their faces.
You begin to pity whoever, one day, has to clean up after them. Thankfully enough, in our case it can very well be an elected economist, rather than the result of an impromptu headhunt.