Croissants and Ouzo Today Could Mean Crisis Tomorrow

All over Europe, demonstrators are taking to the streets to protest the austerity moves. They don't want any of their benefits or rights to be touched.

Greece is going for another round of elections. Public opinion surveys indicate that the majority wants a government composed of radical left parties that are promising to overturn the agreements signed with the European Union. The Greeks don't want cutbacks, taxes or edicts. They want to continue to celebrate; to eat souvlaki and to drink ouzo. And the huge debts? Let them wait quietly on the side.

The French, too, want to maintain their standard of living. They threw President Nicolas Sarkozy out of the government after he raised the retirement age slightly, cut back on expenditures and tried to get people back to serious work. He wanted to lower the large budget deficit in order to maintain France's financial stability, but the French wanted Francois Hollande, the leader of the left, who promised them a continuation of the festivities. Because what's wrong with going on an annual two-month vacation and eating croissants with butter? This is the atmosphere that's now prevalent worldwide: Eat and drink, because tomorrow we'll beat up the wicked economists.

So neither the Greeks nor the French want their standard of living to decline, although it could be brought down without causing much harm. The Greek parliament, for example, has for years been passing laws "to benefit the people." Lawmakers there lengthened the annual vacation, reduced the number of work hours, increased the salary in the public sector, provided lifetime job security for public employees and introduced an early pension at the age of 55.

In a surrender to the strong workers' committees, they invented regulations that make competition and efficiency impossible. For example, trucks that transport merchandise in a certain direction are not allowed to return with merchandise in the opposite direction. The truck has to return empty in order to protect the drivers' livelihoods. And how did the legislators protect the pharmacists? They decided that the minimum profit on each medication will be 35 percent, so that the prices of medications in Greece are the highest in Europe.

When the financial crisis erupted two years ago, not a single worker in the inflated public sector was fired. Instead, hundreds of thousands of Greeks in the private sector were let go, and that sector's revenues suffered. This caused a continued decline in tax collection, an expansion of the budget deficit, an increase in the public debt and an intensification of the crisis and the slowdown. But the Greeks want to continue to celebrate.

In France the choice of Hollande attests to the same dangerous atmosphere. Hollande, a veteran leftist, has a model socialist agenda. He is in favor of increasing government expenditures, lowering the retirement age back to 60, accepting another 60,000 people into the civil service, imposing a special tax on "high incomes," increasing corporate tax, freezing the price of fuel, subsidizing water, electricity and gas for the "weak," and large-scale subsidized government construction. He is the best man in the world, but the entire world is trembling with fear lest he implement what he promised.

If that happens, France will quickly deteriorate, and its situation will start to resemble Greece's situation. But because France is so large and important, its collapse will create a domino effect in Italy, Spain and Portugal, and then all of Europe will find itself in crisis. Banks will fall, stock markets will plummet, returns on bonds will soar and the entire Euro bloc will be in danger of being dismantled.

The truth is that it's not only Greece and France. All over Europe - in Spain, England and Italy, specifically - demonstrators are taking to the streets to protest the austerity moves. They don't want any of their benefits or rights to be touched. They aren't ready for budget cutbacks or tax increases. They want to carry on with the good life, and to hell with all the economists' threats.

The sad part of the story is that we are dependent on them. Israeli exports depend on Europe; our growth and employment depend on the Euro bloc. If it falls apart, the shards will fly and hit us.

Therefore it's not enough for us to understand that we have to cut back too. We also have to pray that the leaders of Greece and France will forget everything they promised on the eve of the elections, and carry out tough cutback plans. For their own good and for ours.