I borrowed this title from the BBC because it frames nicely what I wanted to say.

First of all I’m at a loss to understand why so many people considers this to be a ‘Greek debacle’? Did the Greeks lend money to themselves and then refused to pay or this whole mess started years ago, when some private banks supplied huge amounts of money to a country notorious for her shoddy ways?
Then, when Greece was way outside the European norms about how much debt a country might have if it wished to join the Eurozone, the Greek Government lied blatantly and the European officials knowingly turned a blind eye in that direction.
Later, when Brussels started to make noises about this issue the Greek Government, instead of finding a way to pay some of the debt, used another ‘creative solution’ – a currency swap organized by Goldman Sachs. This time Euro-stat rubber-stamped the deal. Now the blame is put entirely on Goldman Sachs.

In 2010, after it became apparent that Greece was no longer able to service its foreign debt – at that time owned mostly by private banks, a first bailout plan was arranged. In 2011 a second one. This way ownership of most of Greece’s debt was transferred from private to public hands.

On the other hand giving Greece a ‘haircut’ now, before they had even started to mend their crooked ways, would be an insult towards the Irish, the Portuguese and the Spanish – who had all swallowed the bitter austerity pill.

And yet.
Moral hazard aside we have to consider two things. Greece is different from the rest of the Euro-zone and Greece’s accrued debt is so huge relative to it’s GDP that none in his right mind would ever expect it to be payed back. In this respect what is happening now is nothing but an exercise of ‘kicking the can down the alley’.

Now let me explain in which way Greece is different and why this is important for the future of the EU.
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Samuel Huntington has put forward a very interesting theory in which he argues that “The fault lines between civilizations will be the battle lines of the future.” And as you can see in this map, borrowed from Huntington’s book, via Wikipedia, Greece does not belong to the same cultural space as the ‘Western Europe’.
Huntington has drawn that map using the dominant religion as a criterion, in Europe as well as in other parts of the world. Nevertheless he probably has ‘felt’ that his method has it’s shortcomings. America is divided into ‘Latin American’ and ‘Western’ but Europe is not divided into ‘Catholic’ and ‘Protestant’.
And rightly so because what happened in Catholic South America is currently happening in ex Soviet dominated Eastern Europe AND in Greece: rampant and casual corruption that tears apart the social fabric.
What if the nations that inhabit these two cultural spaces have something more in common than ‘top-down’ religious systems – both Orthodox and Catholics have a rather rigid ecclesiastical hierarchy?
Relatively little experience at being independent? At thinking with their own heads, as nations? At being proud of their constant success as teams instead of defining themselves relative to something that had happened in their distant past?

A modern independent nation is, or more precisely used to be, defined by the fact that the elite understands its mission and takes it seriously. Because of that – the positive results, that is, the masses are content with their current elite and follow it – consciously or not so consciously.
A country where the population hasn’t fully reached the ‘national’ stage of development experiences an almost schizophrenic situation. The individuals who should gather together, coalesce into an elite and run country are more preoccupied with their individual short term well being than with making sure that their own children will be able to live in a fully functional country when they grow up. For this reason the general public doesn’t trust the ‘leaders’. And this mutual distrust/disrespect has a very practical consequence: corruption becomes the modus vivendi of the entire society.

It is relatively simple to understand that a relationship of mutual respect between the elite and the general public needs a rather long time to develop and that the process has to take place unhindered by outside intervention. That’s why it cannot take place while the country is dominated by a colonial power, by an imperium or in any other way.
That’s why the peoples that live in South America have only recently started to make peace with their politicians – and not in all countries yet:  they might have conquered their independence from Spain and Portugal almost 200 years ago only their elites had everything in their minds but the general well being of the countries they were running. On top of that the former colonial powers and later the US have all intervened in the daily life of their former colonies/neighbors, further hindering their natural development.
Same thing happened in Eastern Europe. The Baltic States, Poland and Hungary have been, on and off, under foreign occupation but not for so long as to severely damage their development. In contrast Romania, Bulgaria and Greece had not enjoyed real freedom since the XIV-th century. And after they did became independent their elite went looking elsewhere for inspiration. Towards Western Europe at first and to the Soviet Union afterwards.  A somewhat natural thing, given the circumstances, but which did little to forge fully functional nations out of their populations.
Meanwhile the ‘man in the street’ has developed a particular strategy for surviving. He trusts nobody but his family  and close friends and doesn’t pay taxes unless he really has to. He has no qualms to take ‘bribes’ from the state – early retirement, subsidies, etc. – but that doesn’t mean he will trust the politicians that ‘distributed’ those ‘gifts’.

What is happening now, when the European elites are supposed to take their cue from Brussels, is not helping much. Ms Merkel is preoccupied primarily with her own constituency and the EU top brass are fully aware that Berlin has the last word about who gets what top notch European position. Any wonder smaller nations feel ‘neglected’? We should keep in mind that, as Great Britain is just one example, that Europeans do not feel towards the EU what the Americans feel towards the good old US of A.
Eastern Europeans have a particularly hard time. They want to get in the EU – they are both fed up with their local politicians and would like to be part of a working environment but at the same time they have a rather ambivalent attitude towards the EU institutions. This institutions enjoy a lot of respect from the Easterners, because they had worked properly – until not so long ago, at least, but at the same time they are watched with great apprehension. People who have had to take, in the past, their cue from ‘foreigners’ are somewhat weary of this whole thing.

So yes, I’m afraid that the euro-zone will be damaged by the current crises only I don’t think we should be speaking of a ‘Greek debacle’.  In fact the union itself – the European elite, to be more precise – has not entirely fulfilled its duty.

The sooner we understand that, the sooner we’ll know what to demand of it. And maybe we’ll be able to bridge the cultural divide mentioned by Huntington.

The alternative would be dire. The Russian elite – not the Russian people itself, only a fragment of its elite – will grab the opportunity to extend their influence. And by doing so to continue to hinder the natural development of the Eastern European nations. Including Modern Greece.