Arrested Development, Euro edition
Grace Concelman | Monday, November 14, 2011
The current situation in the Eurozone is a story about how a little misrepresentation and a lot of charade can escalate into a full-blown drama.
While we wait for several Eurozone countries to shift around their governments this week, here’s an analogy comparing a dysfunctional continent with everyone’s favorite dysfunctional television family: the Bluths from Arrested Development.
Greece embellished its records when it joined the Euro in 2001. Its true budget deficit was actually greater than the E.U.’s mandated three percent of GDP limit and its projections for the future were based on unrealistic expectations for growth. Ten years later, despite bailouts and austerity, Greece’s deficit sits above 15 percent and the end of the euro is a possibility, albeit a remote one. Although other countries are also struggling with debt, Greece’s problems are (hopefully) the most severe.
George Sr. is not the only Bluth with dubious ethics, but his actions are deceptive enough to land him in jail. Confined to an orange jumpsuit of shame, he sits on the sidelines and watches his family’s antics while somehow maintaining his patriarchal role. George Sr. and Greece are so toxic, my only advice is this: No touching!
Germany was doing just fine until the other countries started to pull it down. In fact, Germany is still faring pretty well in spite of everything. The German citizens have pushed back on the government for using taxpayer money to bail out the weaker members of the E.U., but in the end, it’s really in Germany’s best interest for the Euro to make it intact through the crisis.
Similarly, Michael is the glue holding the Bluth family together. He tried to get away, but found that he couldn’t leave his family behind. His family constantly undermines any authority he has and this frustrates him, but in the end, he’s a good guy.
France is fulfilling its modern role of pretending to be more important and influential than it actually is. In the beginning, France tried to position itself as Germany’s twin. Lately, though, France seems more like the little brother. It has been dealing with internal concerns, specifically the potentially critical exposure of its banking system to Greek debt, and has had to defer to Germany’s leadership in recent agreements.
Gob likes to think that he’s most capable of running the Bluth Company in his father’s absence, but the rest of the family knows otherwise. More concerned with showy “illusions” than real leadership, Gob has always been destined to take the backseat to his brother, Michael. Never put too much faith in Gob or France, because you just might find you’ve made a huge mistake.
The news out of Italy last week was that its 10-year bond rate rose above 7 percent, which is a significant number because when Greece, Ireland and Portugal’s bond rate rose above 7 percent they got bailouts. A bailout of Italy would be a disaster. Italy is continental Europe’s third biggest economy behind Germany and France, and it has five times more debt than Greece. Like their Greek counterparts, the Italians just ousted their Prime Minister, but unlike the Greeks, the Italians haven’t started rioting.
Lucille also loves racking up debt. She’s used to living the good life and intends to continue to do so. Why change anything when you haven’t yet reached the limit on the company credit card?
About a month ago, Slovakia got jealous of all the attention the richer countries in the E.U. were getting and became the only E.U. member country to fail to ratify enhancements for the European Financial Stability Fund (EFSF). The move threatened the future of the EFSF; stocks tumbled and general mayhem ensued. Two days later Slovakia remembered its insignificance and approved the proposal.
Buster is emotionally and economically bound to his family. He couldn’t really exist on his own and usually he’s happy to go with the flow, but sometimes he needs a little special attention too. Just like Slovakia, Buster usually lends a hand in the end.
Ireland and Portugal both got bailouts but are relatively functional and working through their debt issues. Thus, they resemble no one in the Bluth family.
So now, we watch and wait for Europe to find its footing, to rally like the Bluths around the allegorical banana stand. Let’s just hope they have the sense not to burn it down.
Grace Concelman is a senior majoring in finance and philosophy. She can be reached at [email protected]
The views expressed in this column are those of the author and not necessarily those of The Observer.