Postponing the inevitable !

It is hard not to feel sorry for Greek Prime Minister, George Papandreo.  His decision to send the bail out plan to the Greek people by way of a referendum generated such fury from the leaders of France and Germany - and from the financial world - that he was forced into a humiliating retreat.   He has since barely survived a vote of confidence in his own parliament and has been forced to start negotiations to form a new government of " national unity ".

It is said that those who fail to learn from history pay an even heavier price when they repeat their mistakes.

It is one thing to pass legislation to lower wages and pensions, gut the welfare state and fortify the tax regime.     It is something else again to get the people to abide by those rules.

We could see a fairly predictable scenario develop in Greece.  Disaffected people find ways to circumvent unpopular measures.  A " Black market " develops, where a cash economy avoids taxes and resentment makes disobeying the government a way of life.

A little further down the track, we are back to square one.   Greece is again on the brink of default - and another bailout is needed to avoid disaster.      The question is - how long can this go on - and will the rest of the world continue to contribute ?

Perhaps we are going the wrong way.   Perhaps what is needed is an orderly realignment of the European Union and it's Euro currency.  Perhaps now is the time to correct the mistakes of the past.

When the EU was mooted it was a glorious dream of a united Europe, but distrust and suspicion prevented it's countries from progressing to political union, whereby there would be a true " United States of Europe ", with a central power regulating policy, finance - and defence.
The impetus was on expansion.   Prudence was thrown to the wind - and yet we now have one of Europe's largest countries banging on the EU door - and being rejected and refused admission.

White - Christian Europe would dearly love to have the Turkish masses added as customers for EU manufactured goods, but they fear the effect of Muslim migration across EU's open borders if Turkey became a member.

World leaders fear the backlash if there is a default by a EU country.   What would be more acceptable would be a formal restructuring of the European Union.    It would be better to invite those who can not meet the EU requirements for finance to leave voluntarily - re-establish their own currencies - and come to terms with those to whom they owe money.

A smaller, tighter EU is the only hope of preserving some aspects of the EU dream.    The bailout course is simply destined for disaster !