Beliefnet
Rod Dreher

The Greek economic crisis is quickly spreading. Today, Spain’s debt was downgraded, which is a much bigger deal than Greece’s woes. But Greece is loping steadily toward sovereign default. A Greece rescue plan is said to cost a staggering 100 billion euros — or more! I pity the German taxpayers, who are being asked to shoulder the greatest burden here. A German politician said on the BBC this morning that Germans have been good stewards of their finances, and asking them to bail out the spendthrift Greeks is a bitter pill. Who can blame them for balking — especially when the Greeks took to the streets today to tell their lenders to go to hell. A Greek protester interviewed by the BBC said banks and foreign lenders ought to suffer pain, not ordinary Greeks.
While the situation from the Greek point of view is more complicated than we outsiders may think, it is still hard to ultimately side with the Greeks. Unless I’m missing something, it’s mostly the fault of the Greek people and their politicians that they borrowed too much and can’t pay it back (the Chinese may say the same to us Americans in years to come — and they’ll have a good point). If you don’t want to live with austerity measures, fine, then go bankrupt — but don’t complain when nobody will lend your country the money it needs to pick itself up off the floor.
The moral bind the German taxpayer finds itself in is the same one the US taxpayer found himself in during the bank bailout mess: if you allow moral hazard to work, you could destroy the whole economy. Ergo, for our own good we felt compelled to throw money at the badly-run institutions that were causing the crisis. Similarly, the greater good of the whole — heck, of Germany itself — appears to require the responsible Germans to bail out the irresponsible Greeks.
The question that will remain after this is over is: why should a politically and economically responsible country like Germany be economically bound to a mess like Greece, and other southern European nations? As I’ve written here before, on my honeymoon in Portugal 12 years ago, a Portuguese businessman back home after having worked in London for years spoke cynically about the EU and his country. He said the northern Europeans were going to be in for a very rude shock once they realized that Portuguese politicians had for years been taking gobs of money from them, and had blown it. And then the whole European integration project would be in question. Julio, old boy, your prophecy looks to be coming true.
UPDATE: Felix Salmon provides a gloomy overview of the whole thing. Bonus: a quote from Nouriel “Dr. Doom” Roubini saying that the whole Eurozone may fall to pieces over this.

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