Tragedy looms in Greek austerity drama

What is the difference between a Greek drama and a Greek tragedy? One is an epic of heroism, treachery, blood and tears that can be tragic, comedic or satirical. When it ends in tragedy, we can expect a mess with loss for all. January's election of an anti-austerity and left-leaning party in Greece (the fount of democracy) highlights the country's dramatic range.

We aren't there yet, but the risk of the outcome of a Greek tragedy, not just for Greece but for Europe, is rising.

All theatre tells stories about reality, but from different perspectives. The Greek drama is unfolding right now, because there is a stand-off between the Greek people arguing that they can no longer bear the pain of austerity and a bunch of European ministers of finance who insist that Greece must obey what its previous governments agreed on - continued austerity.

This week, the Greek prime minister is visiting Moscow, but he is unlikely to get any monetary help, considering that Russia is bleeding from sharply lower oil revenue and EU sanctions arising from Ukraine.

There is no doubt that Greece has made many mistakes, such as running unsustainable fiscal deficits within a fixed exchange rate regime (the euro system). Most of the deficit is due to the fact Greek pensions are among the most costly in Europe, amounting to 17.5 per cent of gross domestic product, compared with German pension costs of 12.5 per cent of GDP. Only 36 per cent of Greeks between 55 and 64 years old are still working, compared with 63 per cent in Germany. Small wonder that ageing Germans who are still working are not keen to support Greeks who can retire earlier with pensions.

Greece has made significant progress since the crisis but it cannot sustain that fiscal discipline, because it pays 11 per cent per year on its 10-year debt, compared to 0.51 per cent for France and Spain's 1.27 per cent.