Are we still facing a global Greek tragedy? The austerity measures voted through in the Greek parliament, to prevent a default on its sovereign debt standing at around 150 per cent of GDP, may only have ‘kicked the can down the road’, as a British commentator puts it. They are no guarantee that the Greeks will stomach the cuts or that Greece will not default on its debt, putting the future of the eurozone at risk. A Greek debt default would have serious knock-on effects on other weak European economies including Ireland, Portugal and Spain, and throughout the global financial system.

Big Western banks are too exposed to Greek debt for the Eurozone and the IMF to allow Greece to default. But Greece may still need a further huge rescue package. The new head of the IMF, Christine Lagarde, has her work cut out for her.

The strain on the global financial system could yet turn out to be far worse than the collapse of Lehman Brothers on 15 September 2008. Total credit in the global system is 10 times the GDP of the entire planet, according to the Peruvian economist Hernando de Soto. Much of it is meaningless electronic trading, not backed by tangible assets. In the USA, by the end of 2010, $52.6 trillion of credit was outstanding. In 1971, the ratio of total credit to GDP was 150 per cent. More recently it has been 354 per cent. In other words, credit has been growing much more rapidly than the economy for the past four decades. In Britain the ratio of debt to GDP is around 80 per cent, the same as Germany and France. Trades unions in the UK have gone on strike against cuts in public sector pensions.

Such situations are unsustainable in the long run. If the house of cards starts to collapse, we could see the collapse of currencies. Many commentators talk not about whether there will be another financial crash but when. The crash of 2014-15 could be on its way.

The implications for sustainability, for businesses and jobs, for housing, will be dire. Another financial crash will have a devastating effect on human security--the crash of 2008 pushed 100 million people into poverty according to the World Bank. Unemployment in western economies rocketed.

Another crash would also put a huge pressure on human solidarity, as we have already seen in Greece. Why, many ordinary working people feel, should we pay the price for the profligacy of the banks and governments, for other people’s sins? (That is the nature of ‘sin’; it is often the innocent who suffer its consequences.) As Jason Manolopoulos, the Greek author of Greek’s Odious Debt, comments: ‘The bailout consists of more debt being piled on to the existing mountain of sovereign debt to prevent, or delay, a disorderly banking crisis and to salvage the single currency--an unsustainable policy that compounds a monstrous financial crime in which the victims are future taxpayers’ (The Times, London, 30 June).

The great diseases that have brought us to this scenario are twofold: the unrestrained pursuit of wealth and overabundance, by fair means or foul, devoid of all other considerations. This is a consequence of the triumph of free market laissez faire unregulated capitalism, following the end of the Cold War. And, secondly, a crisis of values. As a colleague of mine puts it, the global financial crisis (GFC) is in fact a global integrity crisis (GIC). Or as the so-called HBOS whistleblower Paul Moore puts it, we have substituted GDP for GMeP. Others have commented on the moral dimension of the financial crash. Mervyn King, Governor of the Bank of England, quotes Adam Smith’s Theory of Moral Sentiments, in a major interview in The Daily Telegraph; Gordon Brown concludes his book Beyond the Crash: the first crisis of globalization with a chapter headlined ‘Markets need morals’.

Yet few if any lessons have been learnt from the crash of 2008. Investment banks are still dealing in casino derivatives; there has been little or no legislation outlawing dodgy practices and virtually no prosecutions for wrongdoing. In his entertaining and excoriating book Whoops!, about the crash of 2008, John Lanchester has a paragraph listing the laws introduced, and prosecutions for wrongdoing, to deter another crash. It is simply a blank space on the page!

Corruption was at the heart of the financial crash, with ‘ninja’ mortgage loans being sold to those with no income, no jobs and no assets. Yet UK banks are now mis-selling interest only mortgages. They have been fined for mischarging customers for pension protection insurance policies which their customers didn’t ask for. The banks are still proprietary trading their own assets, incurring high risks. Gambling remains the norm and the excessive bonus culture has hardly been tackled. As Will Hutton, columnist and executive vice-chair of the Work Foundation in London, comments: ‘We are at the end of the beginning, not the beginning of the end.’

We will have to reappraise our entire basis of values, away from a materialist pursuit of excessive wealth. Indeed those who survive a monumental collapse in our global financial system will be those whose values are rooted in human compassion and solidarity, on unselfishness and care for family, friends and neighbours. The alternative will be accumulating anger, bitterness, class war, violence and death.

Roger Steare, visiting professor in corporate philosophy at Cass Business School in London, goes so far as to say: ‘We need a second, much bigger economic and financial crisis to shock humanity into dealing with the unsustainability of our industrial political-social-economic philosophy. It is unsustainable because it is based on the ethos of infinite growth within a finite ecosystem. Like the cancer cell, we seem to have no understanding that our malignancy will eventually kill the host that gives us life.’

It has been well said that ‘the rich may have to live more simply, that the poor may simply live’. Indeed, it is often the poorest in the poor parts of the world who are ‘artists in the art of survival’. We may all have to learn the art of survival if there is a further collapse in the global monetary system. Those who survive will be those who see human relationships as being far more fundamental and important for survival than material possessions and wealth.

Do we live in the reality of this possible scenario? Are we prepared?

Michael Smith is a freelance journalist and head of communications for Initiatives of Change, UK.  

NOTE: Individuals of many cultures, nationalities, religions, and beliefs are actively involved with Initiatives of Change. These commentaries represent the views of the writer and not necessarily those of Initiatives of Change as a whole.