Greece is following the road taken by several othercrisis-ridden emerging economies over the past 30 years. Indeed, asI argued earlier this year, there are stunningsimilarities between this once-proud eurozone member and Argentina prior to its default in2001. With an equally traumatic implosion – economic, financial, political, andsocial – now taking place, we should expect heated debate about who is to blamefor the deepening misery that millions of Greeks now face.

There are four suspects – all of theminvolved in the spectacular boom that precededwhat will unfortunately prove to be an even more remarkable bust.

Many will be quick to blame successive Greek governments led by what usedto be the two dominant political parties, New Democracy on the right and PASOKon the left. Eager to borrow their country to prosperity, they

racked up enormous debtswhile presiding over a dramatic loss ofcompetitiveness and, thus, growth potential. Some even sought to be highlyeconomical with the truth, failing to disclose the true extent of theirbudgetary slippages and indebtedness.

Having borrowed far too much after joining the eurozone in 2001, NewDemocracy and PASOK let their citizens down when adjustments and reforms wereneeded after the 2008 global financial crisis. An initial phase of denial wasfollowed by commitments that could not be met (indeed, that some argued shouldnot be met, owing to faulty program design). The resulting erosion in Greece’s internationalstanding amplified the hardship that citizens were starting to feel.

Hold on, I hear you say.For every debt incurred there is a credit extended. You are right.

Greece’s private creditors were more than happy to pour moneyinto the country, only to shirk theirburden-sharing responsibilities when the artificial boom could no longer besustained. The over-lending was so widespread that at one point it drove downthe yield differential between Greek andGerman bonds to just six basis points – a ridiculouslylow level for two countries that differ so fundamentally in terms of economicmanagement and financial conditions.

Overeager creditorswillingly underwrote this absurd risk premium. Yet, when it became abundantlyclear that Greece’sdebt burden had been taken to insolvency levels, creditors delayed the momentof truth. They dragged their feet when it came to the critical agreement onorderly burden-sharing (that is, acceptance of a “haircut” on private-sectorclaims on Greece).And the longer they did that, the more money left Greece without any intention ofreturning.

But neither the Greek government nor its private creditors acted in avacuum. Both took comfort from the political cover provided by the Europeanunification effort – an historic initiative aimed at securing the continent’swell-being through closer economic and political integration on the basis ofcredible rules and effective institutions.

On both counts – rules and institutions – the eurozone fell short of what was required. Remember, thelarge core economies (Franceand Germany)were among the first members to breach thebudgetary rules that were established when the euro was launched. And Europeaninstitutions proved toothless when it cameto enforcing compliance. All of this served to sustain the fantasy world thatboth Greeceand its creditors happily inhabited for fartoo long.

Europe also failed to react properly when it became obvious that Greecewas starting to teeter. European governmentcounterparts failed to converge on a common assessment of the country’sproblems, let alone cooperate on a proper response. While they grudgingly loosened their pursestrings to support Greece,the underlying motives were too shortsighted, and the resulting approach wasstrategically flawed and abysmallycoordinated.

Finally, there was the International Monetary Fund, the institutioncharged with safeguarding global financial stability and being a trustedadviser to individual countries. It appears that the IMF succumbed too easily to political pressures duringboth the boom and the bust. Political expediency seems to have trumpedanalytical robustness, undermining both the Fund’s direct beneficial role andits function as a policy and financial catalyst.

On the surface, each of the four suspects has an individual case forarguing that the finger of blame should be pointedelsewhere. They could even argue that, at worst, they were uninformed accomplices. But that is not really right.

None of the four can avoid the reality that Greece’s collapse would not haveoccurred had they not been complacent duringthe boom and, subsequently, fulfilled theirresponsibilities during the bust so poorly. They suckedeach other into a sense of false prosperity, only to trip each other up duringthe inevitable downturn. Now, one hopes, all four will be held properlyaccountable by their stakeholders and undertake serious self-evaluation.

Most likely, they will end up getting off too easy, especially compared tothe real victims of this historic tragedy – the most vulnerable segments of theGreek population, who will become much worse off,today and for many years to come, as jobs disappear, savings evaporate, and livelihoods are destroyed. And they may not bealone. Millions of others may experience collateral damage, as financialcontagion risks spreading to other European countries and to the global economyas a whole.

In a fairer world, these vulnerable citizens would be entitled to claw back the salaries, official privileges, andbonuses that the four parties to blame enjoyed for too long. In the world as itis, they are a compelling lesson for the future.