By Eric Reguly, Globe and Mail, May 23, 2012
The crisis in the euro zone has lurched into its most dangerous phase yet, putting intense heat on leaders to stabilize Greece quickly, or ensure its exodus does not trigger an economic catastrophe.
Until now, the focus has been on rescuing Greece and saving the 17-member monetary union in its entirety. But Wednesday, Germany’s central bank broke a taboo among monetary officials by raising the spectre of Greece leaving. This came amid reports, denied by Greece, that the group’s individual finance ministries were drawing up contingency plans.
Heightened fears of a break-up of the euro zone, potentially wrecking the European banking system and plunging the continent into deep recession, pummelled the currency and sent stocks tanking. This came as EU leaders met in Brussels for a summit that, yet again, took on a crisis flavour just two months after Greece accepted €130-billion in fresh bailout loans in exchange for severe austerity commitments.
After a two-day rally, London’s FTSE 100 lost 2.5 per cent while the Eurofirst 300, which tracks the performance of Europe’s biggest public companies, shed 2.2 per cent. North American stocks recovered lost ground late in the day.
Sometimes, it seems as if the stock market readings are more like a simple basketball game, where the shocks and quivvers, the changes in momentum, mood and even anxiety are more important than the structural and long-term "health" of the market and its potential to endure. We have made an unending drama out of the movement of the "ticker" as if we could predict the short-term future based on the latest nano second's reading of world events.
We all know that both politics and economics are very imperfect and unsubtle and unsophisticated sciences.
Even more blunt and un-nuanced than the law, we watch these stories, which not so incidentally, impact the political debate more than they should, and wonder how such pressure to perform, as if every moment were the apocalypse's entrance, could possible contribute to the healthy debate of mature, honourable and visionary leaders.
Martin Luther King used to say that when a man knows clearly what he will die for, he is then prepared to live life fully. But knowing what one would die for is quite different from facing a faux apocalypse, created for the purpose of keeping those responsible for market strength and health "on their toes"...
Imagine a surgeon in the middle of the most delicate and complicated procedure, seeing on the heart monitor, that the patient's heart has stopped. Now that's a crisis, and I have never heard an adequate explanation of why the market has to operate at that same crisis point every moment of every day of every month of every year...
Especially, when we all know that decisions taken under such circumstances, by those untrained to meet such exigencies, are not necessarily in the best interest of either those making the decisions, nor of the rest of the world community. That's why we have professionally trained, and experienced doctors operating in a small room, with other expert doctors at their side, making decisions in the best interests of the patient, knowing that whatever the result, they will have to "report" to the patient's family the result of their work.
That's accountability, and it makes for enhanced responsibility.
To whom to the leaders of the EU have to report, should Greece fail, and the EU dissolve, in the same sense that that surgeon has to face the family of his/her patient.
Markets have a way of sliding, willy nilly, without the control of a single pair of hands at the tiller, to mix the metaphor. And the media does no one, and no country and no company a favour by reporting every blip on the market's heart monitor.
Let's grow up, stop worshipping at this phoney, man-made altar of power, and start looking down the road, for better, more mature and less pressured long-term economic solutions, in a spirit of confidence, and balance, not from a perspective of self-generated "terror".
And to think it was the economic, financial and political community that dubbed the global warming and climate change predictors as apocalyptic, in order to render the importance of their arguments for change, some two decades ago.
Have they no shame for their hypocrisy?