Opinion

Athens, calif.

. . . while his American cousins storms streets in Oakland.

. . . while his American cousins storms streets in Oakland. (Getty Images)

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LONDON — This island off the course of northwest Europe is turning out to be an excellent viewing platform for three blockbuster shows this summer: Queen Elizabeth’s 60th anniversary Jubilee, the London Olympics and the implosion of Europe.

The group of countries using the euro as a joint currency is “a burning building with no exits,” says Britain’s foreign minister William Hague. The Europeans with flames lapping around their ankles are the Greeks, but the whole continent is about to feel the burn.

Yoking most of Europe together with a single currency has proved as unstable as Napoleon or Hitler trying to lasso it with a single army. The euro project was doomed from the start, when the expert economists and Ph.D.s and we-are-the-world Eurocrats almost unanimously agreed that pushing through monetary union without fiscal union was a sound idea. It turned out to be like giving alcoholics the keys to the liquor store.

Panicked Greek voters, who haven’t been able to elect a government with a working parliamentary majority, are about to have a second round of elections in June. The most popular party in polling is the far-left Syriza outfit, led by a 38-year-old former communist named Alexis Tsipras, who has labeled Greece’s latest bailout and austerity package as “criminal.”

If he takes over, he vows to default on Greece’s loans, launch a new spending spree and dare the Eurozone to throw his country out. That would cause or, more likely, be preceded by, a run on Greece’s banks as Greeks hoard euros against the inevitably weak drachmas that would replace them.

On Monday, Greeks withdrew $900 million from their bank accounts. “Of course there’s no panic,” said Greece’s figurehead president Karolos Papoulias, “but there’s great fear which can evolve into panic.” Somebody give this guy the award for least-reassuring reassurance of the year.

Almost as non-reassuring is the comment of Paul Krugman that this isn’t a “bank run” but a “bank jog.” And we all know jogging is good for you.

How bad are things in Greece? Syriza has no plan to pay for its fantasies — wiping out its debts wouldn’t mean Greece magically had enough funding to pay for obligations going forward — and Germany has repeatedly said it will continue to fund Greece only if it will continue to cut back on its bloated government spending while enforcing serious tax hikes. The Greeks want to stay in the euro (by a margin of 78% to 12%), and they want to go back to spending freely. They cannot have both. What looks like “draconian austerity” right now is going to look like a sunny day on Sifnos compared to what’s coming.

Greece is simply a bubble that had to pop. As Michael Lewis showed in his book “Boomerang,” Greece needs massive corrective measures just to return to the range of how normal countries operate. By longstanding tradition, tax evasion is a way of life: Two-thirds of doctors reported income of less than 12,000 euros, below which no income tax is owed. Serious enforcement would mean putting every doctor in Greece in prison, a knowledgeable observer informed Lewis. Many workers have enjoyed retirement and state pensions as early as age 50 or 55.

Despite having one of the lowest education rankings in Europe, pre-austerity Greece employed four times as many teachers per capita as Finland, which has the best. A state railroad system is so badly run that an economist calculated it would be cheaper for the government to simply pay for cab rides for everyone.

Such countries never should have been invited to join the Euro in the first place. Greece and others phonied up their numbers to prove they had reformed their habit of simply printing money to pay their bills. Joining the Euro meant they could borrow cheaply on Germany’s credit card — but they were now in the control of the country that hates inflation more than any other. A rupture was inevitable.

Jacques Delors, as European Commission president, cheered the creation of the Eurozone and played Monsieur Magoo when it came to looking at the books. Now he says, “The finance ministers did not want to see anything disagreeable which they would be forced to deal with” and “Everyone must examine their consciences.” What’s French for “Oops”?

At this point, the British are wiping their brows in relief that they rejected Eurozone membership. Conveniently forgotten is how opponents of the euro were once scorned as “backward.”

The Financial Times said “immaturity is the kind explanation” for the views of the rear guard of UK Conservatives who successfully opposed the elites’ calls to replace the British pound with the Euro. The FT declared of Greece, “membership of the Eurozone offers the prospect of long-term economic stability.” As late as 2008, the paper was still saying of the monetary union, “it has succeeded.”

The “Blighty” blogger for The Economist writes, “I first became interested in politics at around that time and recall vividly that in my then newspaper of choice the term ‘Euroskeptic’ would often be partnered with a phrase such as ‘swivel-eyed’ or ‘foaming at the mouth’ in the same sub-clause, even though, by any measure of public opinion, it was far stranger to be pro-euro.”

Now the tubercular Greek economy has shrunk by 20% and is still contracting by 5% a year. Greece is looking like it will crash out of the Euro, to the accompaniment of the destruction of Greece’s banks, empty coffers for all those dependent on government checks and general panic in the streets which could easily cause bank runs and similar chaos in Portugal, Spain or Italy.

Weak drachmas wouldn’t be able to pay for vital imported goods like medicine. Economic refugees would (try to) flee the country, but other countries’ citizens would scream for the borders to be closed up quickly.

In the absence of clear authority, conditions would be ripe for a strongman to take over Greece. Strongmen tend not to be very nice. A majority of police officers, according to a survey published in the Athens paper The Tribune, voted this month for the neo-Nazi group Golden Dawn.

Lee Harris, writing for the American Enterprise Institute, brings up a crucial point about Greece: In the US, “No one seriously argues that the period of austerity (i.e., recession) was the deliberate policy of this or that administration. But the European austerity programs are the deliberate policy of the governments that have imposed them, and this is a fact that every citizen forced to tighten his belt is perfectly aware of.”

Greeks aren’t going to be waiting patiently in breadlines singing “Brother, Can You Spare a Drachma.” We’re talking about serious rage. Greece may be the cradle of democracy, but its current democracy is only 37 years old. Before that: military rule.

These sound like just the kind of conditions you probably don’t want if your best hope of climbing out of recession is to attract tourists.

Nationalism, which the EU was supposed to cure forever as all member nations joined hands and sang hosannas to Delors, is rising again like heartburn: A left-wing Greek member of parliament declared, “Achtung Frau Merkel. The Greek people want to live free and they don’t want to be under a new occupation from Germany.” A left-wing extremist group torched a car belonging to a German who leads an EU task force on Greece. In relatively unscathed France, extremist parties captured 30% of the vote in this spring’s presidential elections.

ATHENS? I’d like you to meet Sacramento. The two of you should have a lot to chat about. Such as what to do when you’re in a burning building with no exits.

In California, efforts to close the budget deficit by taxing the rich resulted in the deficit shrinking from $9 billion all the way to $16 billion. Gov. Jerry Brown’s proposed solution: Tax the rich even more (and tax everybody else, too, by hiking sales tax).

California contains about one-third of the nation’s welfare recipients (despite having 12% of the nation’s population) and is planning a high-speed rail system that will cost an estimated $68 billion, including $4 billion on a section The Los Angeles Times dubbed a “train to nowhere.” Its pension costs for public employees, 85% of them unionized, rose 2,000% in the first decade of this century, which is 1,976% more than revenues increased. A CEO survey in April ruled that California was the least business-friendly state in the US.

In 1999, when the state was flooded with dotcom tax revenue, it set in place a law, SB 400, that assumed the good times would continue forever and allowed government workers as young as 50 to retire on 90% of salary they earned in their final year, when they would ramp up the overtime. In order to cover these commitments through the CALPERS investment fund, the Dow Jones Industrial Average would have to be over 25,000 by now.

Pension and health-care spending for retirees are set to triple this decade. More than 12,000 state and local workers are collecting more than $100,000 a year in pensions. Even convicted felons can collect pensions.

Greek and Californian politicians made the same mistake: They wanted union backing so badly that they promised far more than they could ever deliver. They knew that they’d be long gone before the crisis kicked in, or maybe it would solve itself. Either way, they didn’t care. They were happy to use tomorrow’s seed corn to buy themselves power. California’s pension plans face a $500 billion hole in unfunded promises.

Gov. Brown says he wants to reform the cost structure of California by raising the retirement age and making other adjustments in a 12-point plan that looks much like pouring a glass of water on a forest fire. He won’t be able to get it through his union-bought Democratic legislature anyway. And courts have ruled that pension plans can’t be changed retroactively for current workers or retirees.

There are only so many Mark Zuckerbergs to tax (and Zuck’s old roommate Eduardo Saverin renounced his US citizenship and moved to low-tax Singapore. He saved himself at least $67 million in capital gains taxes by so doing.) California could default on its bonds, but then how would it borrow again? For a state to declare bankruptcy is unprecedented, and there is no provision for it under federal law anyway.

One certainty is that California is our problem, just as Greece is Europe’s. They’re both too big to fail. The UK’s ex-finance minister Alistair Darling notes that even if Greece exits the Eurozone, the rest of Europe will have to pitch in anyway, this time not to backstop the banks but simply to “stop people going hungry.”

We are constantly being told that the national conversation is being hijacked by ideological zealots — Second Amendment freaks or evangelicals or eco-catastrophists. Until recently in American history, though, unions were seen as a good thing, a tool the ordinary worker could use to get some leverage against “heartless capitalism.” Then, while voters weren’t looking, public-sector unions hijacked taxpayers to award themselves extravagant pay and benefit packages.

“Sustainability” is a word we use a lot, yet hardly ever when it comes to fiscal matters. California’s largesse is no more sustainable than Greece’s. Each of them is bound to face a horrible reckoning.

Kyle.Smith@nypost.com