5 - A Greek Tragedy

Summary

Europe’s journey toward the ideal of ever-denser integration, peace and prosperity has been buffeted by repeated trials of temptation, frustration and risk. Like Odysseus, who bound himself to the mast of his ship to avoid the seductive songs of the Sirens, political leaders of Europe bound themselves by treaty and fealty to the principle of fiscal discipline in order to protect themselves from the alluring yet fickle flows of global capital. As they discovered, such constraints are neither always effective nor always desirable. Consequently, also like Odysseus, economic policymakers and national politicians continue to employ a wide range of strategies to steer Europe past the twin challenges posed by a modern-day Scylla (i.e., a multiheaded monster of sluggish economic growth, resurgent nationalism and social unrest that threatens to yank politicians out of office and cast countries out of the European Union [EU]) and Charybdis (i.e., a whirlpool of financial capital energized by expansive monetary policy and conditional bailouts that threatens to pull individual countries and perhaps the EU itself underwater).