Once upon a time, there was a colony of ants that was slogging it out on a hot sunny afternoon collecting and stocking up on food. While the ants were toiling thus, a grasshopper who was making merry and singing away to glory. The grasshopper ridiculed the ants and their toils in the hot boiling sun, while the ants just kept about their job. In a few months, winter set in. The ants were happy eating the stocked food, in the warmth of their ant hills. Suddenly there was a knock on their door, and the grasshopper was outside, asking for some food. The ants replied, "You sang all summer and didn't show foresight. You made fun of our work, so now spend winter dancing."
A fiercely capitalist ideology would perhaps hold on to this notion of pure meritocracy. Indeed the whole concept of 'too big to fail', that has been dealt with at length in several news articles over the past couple of years and also mentioned several times right here on the lilac avenue is criticized by economists. They are of the view that this whole backing of large corporations by the government or bailing them out of bankruptcy is in a way condoning their faults and gross mismanagement. And that gives a signal to industry that once you bloat up in size, it's your way or the highway.
So when Greece teetered on the brink of collapse, and several Eurozone nations looked rather precarious, (they were called the PIGS - Portugal, Italy, Greece, Spain), people started worrying about the Euro. They looked towards Germany that has been steamrolling its way towards becoming a strong force to reckon with. Their laws are robust. Their industry is solid. Other statistics are strong as well. Indeed, having paid reparations through 2 World Wars, battling hyperinflation and having almost a generation of people wiped out thanks to the wars, taught them the fine art of fiscal balance and thrift. So they didn't go about borrowing and spending their way to progress. They were the ants in this story!
The PIGS were the grasshopper. Greece is rumored to have debts = 150% of their GDP. Thrift or spendthrift? And so, when all hell began to break loose, and people started looking at the country, they realized that this bubble needed to burst. Having burnt their fingers once through the sub-prime balloon that looked bright and yellow for a while, before a ghastly blast, people realized that the kind of social security measures, the benefits, the lax labor laws, all were pointing towards economies that were living way beyond their means. So they dropped Greece as if their hands were smeared with grease! And pretty soon, IGS followed.
The world worried whether Germany, whose progress looked like it was in a way not being allowed to reach it's full potential thanks to being bogged down by the Euro, might want to break away and restart with the Deutsche Mark. It looked like a very tantalizing proposition. Indeed there were discussions happening to that effect! But then, here being fiercely capitalist and meritocratic may not really be the right option. A corporation is one model and a country is yet another. A corporation can fail, and cause temporary pain to some people, maybe even an industry, resulting in long term gains achieved through improved legislation and measures. But if a country like Greece failed, or rather was allowed to fail by Germany, Germany would have faced dire consequences. Germany's growth is to a large extent dependent on exports, especially to other European countries. So, if one of those countries failed, Germany would lose a large chunk of her GDP! So in a way, condoning the past follies of these countries and propping them up, seems like the best option for the greater good of European humanity.
That said, in a way Spain winning the FIFA World Cup is good news. No doubt Casillas and Co are a happy lot, having won Spain's maiden World Cup. The mood in Spain is upbeat too. Rafa won the French Open and Wimbledon after a one year hiatus. And now Spain has the World Cup. So people would be happy. Happy people perhaps would spend, and boost confidence in their economies and that might just be the point where the European economy turned the corner towards the good! Weird thought, but worth the cogitation, right?