There is a theory about that Greece and Portugal are normal European countries. They aren’t. Greece keeps electing members of the half-American left-leaning Papandreou family to run the country because they represent continuity in a place that was riven by post-War shocks like repossession of territory from Turkey; an attempted Communist takeover and invasion; the monarchy abdicating; a military dictatorship; the restoration of democracy in its homeland. And then capping that incredible sequence of events, the seemingly miraculous acceptance of EU its membership application despite what everyone knew were fudged numbers.
Portugal is not a normal place either. It suffered similar shocks. Having had the longest lasting fascist dictatorship in place after World War II, it overthrew this with a revolution. Not a Tea Party Sarah-Palin-style Revolution, but a real one, with people and barricades confronting tanks and soldiers.
The strongly left-wing uprising involved factory and farm takeovers and stripped the country’s elite from their property. Many fled to Brazil. Portugal opened the intellectual and economic borders for the first time since the 18th century Marques de Pombal. It entailed abandoning a colonial empire that had existed for four centuries.
Yet post-shock, sensible compromises were accepted and the country moved toward Europe.
The payback for the two countries and the European Union does not come from budgets and balance sheets. This is why European Central Bank governor Trichet will not be photographed standing with his arms crossed at George Papandreou or Jose Socrates signs a letter of capitulation to EU demands.
An even more grotesque scenario is also unlikely: a mano a mano between sex-starved IMF managing director Dominique Strauss-Kahn and Greece’s financial advisor, himself a former IMF economist, Nobel prize-winner (and scathing IMF critic) Joe Stiglitz.
Explanations may be in order. Stiglitz won the economic prize in 2001 after his criticisms of a prior French IMF managing director, Michel Camdessus, got him into hot water there. Camdessus famously was photographed with his arms crossed laying down the law on the austerity terms Indonesia had to accept to get financial assistance. Joe concluded that the IMF deflation and cutback medicine during the Asian financial crisis had exacerbated it. He is now formally an advisor to the Greek Central Bank but would probably freelance to help the Portuguese as well. Or even the Spaniards.
Strauss-Kahn was named managing director despite an affaire with a Bulgarian born economist whom he also helped find a top job. He was warned to confine his bedroom antics with Anne Sinclair, his wedded wife. As you might have guessed, I know the French players and Joseph Stiglitz.