The European Union (EU) has been a work in progress for many years. Since its inception there has been tremendous tension between what can be decided at the EU level and what is decided by the individual countries. Despite an expensive European Parliament the vast majority of the power is held by country governments. That’s in stark contrast to the US where thanks to the Federalists, the Federal government has real clout. As we are now experiencing, the European setup makes it difficult to maintain the cohesion required for a single currency. Calls in Greece for a return to the Drachma are growing and a messy break-away from the EC is now a distinct possibility.
It is fascinating to see that part of what is fueling the Greek resistance to the draconian cuts demanded by the EU is not that distant from Occupy Wallstreet: it is the sense that government is controlled by outside interests which represent a few large banks instead of representing the people. It is easy to point fingers and say “you lived beyond your means” (in Greece the government, in the US the home buyers) and now have to bear the consequences. But the flip side of that argument is that the banks too behaved as if there were no risk. So if both lenders and borrowers are to blame, why are the policies favoring the lenders so heavily? That is at the heart of the Greek conflict and it is at the heart of Occupy Wallstreet.
These conflicts will not go away until we collectively manage to claw government back from the control of a few large corporations. That’s why we need more separate democracies rather than fewer. We need more experimentation not less to find our way to the future. And why everyone should read “Republic, Lost.”
As an important aside for startups: I wrote a while back that companies that need to raise money should do so quickly. For a moment it seemed like I might be wrong about that as the EU appeared close to resolving the Greek debt crisis and the US markets were rallying. But I am continuing to be very bearish on the financing environment. Even if there is a short term resolution for Greece, the underlying structural problems are not being fixed and so the next crisis is just around the corner.