The euro crisis has upset traditional ideas of what makes a nation powerful by turning Greece into one of the world’s most feared countries. It illustrates how the globalized economy gives almost any nation the chance to influence events around the world.

The government that emerges from Greece’s elections, the policies it adopts, the potential for a debt default and the threat of contagion, and the big question of whether Greece stays in the euro-zone are all concerns that provide Athens with international influence.

Greece may not be using it overtly and may have preferred not to have it, but it’s there. The country’s financial weakness is now a geo-political strength. With its potential to disrupt foreign economies, Greece has the ability to unleash a broad wave of country-by-country problems that can put new and challenging demands on other governments.

Having financial exposure to Greece - or even exposure to countries that are exposed to Greece - is enough to make many countries nervous. Creditors are dispersed so widely that no single nation can help it alleviate the problem bilaterally.

Groups of countries are proving no more adept. The raging debate over austerity or growth has prevented the emergence of a strong enough collective response to halt the crisis, and this has only heightened Greece’s power, at least in relative terms a: sort of “divide and conquer” result without the effort.

Military strength - regardless of how substantial or modern - offers exposed countries no protection in this situation. According to the Stockholm International Peace Research Institute, defence spending last year was around US $711 billion in the United States, US $58 billion in Great Britain, US $58 billion in France and  US$43 billion in Germany.

Greece, however, spent less than US $8 billion, and yet it is causing all the others to take reactive stances to defend themselves from the damage its decisions can inflict.

In effect, Greece has more control over what happens elsewhere in the world than it has had in more than a millennium. Whether and how this is channelled into seeking economic or political concessions from other nations will depend on the will and the skill of Greek leaders. If they succeed, they may alleviate some of the economic pain being felt by the Greek population.

Yet there is an ominous irony: Greece would see its influence erode if its financial situation was to improve. In other words, recovering financially would make Greece weaker geo-politically. This could tempt Greece to retain a degree of financial weakness - to the extent it is tolerated by the Greek population and by countries that may, of course, be able to apply pressure by other means.

What makes the euro crisis enlightening is how clearly it reveals the evolving nature of state power. Military strength isn’t out, but it’s certainly not alone as a source of global authority. Eventually, it may no longer be the dominant one...

Greece has shown how the route to geo-political power is open to any country - large or small, prosperous or poor - that attracts others to become tied to it in financial or other ways. Globalization makes this possible, and can allow it to happen rapidly and with modest financial resources.

It may take other cases - accidental or intentional -to understand more fully what is involved here. One lesson from Greece is that the process can entail domestic risks: greater potential influence abroad may be at the cost of internal instability.

Nations tend to pursue their interests with the means they have available. The more we know about how state power accumulates and deteriorates, the more this understanding is applied by governments. The euro crisis, as shown by Greece, has demonstrated how financial liabilities can be an asset in this regard.

(Photo © DR)

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