Perhaps the bankers of the Ancien Régime also felt they were doing God’s work. May be not. The Greek government was advised by the financial geniuses, who brought us the alchemy of credit default swaps and other clever mechanisms, to cook the books and deceive investors and other members of the European Union for a number of years. My knowledge and understanding of finances and economics are minimal, but this sounds totally bonkers.
These dubious practices allowed the financially wobbly countries such as Greece and Italy to join the single currency. The euro was a political product, and perhaps political consideration and priority to allow more countries into the euro trumped any economic or budgetary concerns that these states had raised. Now, this leniency is casting a dark, long shadow over the currency.
By clever and creative accounting practices, deficits and borrowings magically disappeared from the books. In return, the government made commitment to pay back the money over a long period of time. Some future revenue sources (such as airports and the lottery) were assigned to pay for the loans that did not conveniently appear as such.
It sounds a bit like the Ancien Régime in France, where the finances were in a dire shape, and future revenue was assigned and pledged to the creditors in return for up-front payments. Nominal state assets were no longer really belonged to it. I doubt guillotines will be erected in the middle of Athens as a result, but this is very ominous.
This plays badly for the Greek efforts to secure a bailout from other euro-zone countries. The Greek state has lost a lot of credibility over the past few weeks, and the public opinion in euro-zone countries, especially Germany, will turn quite sour. Germany will have to cough up a large proportion of any such plan, and since Chancellor Merkel is not too enthusiastic about the prospects, more insecurity will surround Greece and the euro.