There is a poisonous undertone to the debate here concerning the ruinous state of public finances. The sophisticated version of this was expressed by the prime minister himself, and it amounts to the claim that the situation is to a significant extent the fault of Europe. There is a modicum of truth to this, acknowledged by Juncker himself yesterday. It is a fact that the Europeans were not monitoring the situation and thus gave free rein to the Greek government's impulse to gobble up other nations' money to feed the ravenous greed of its hangers on. But from this to conclude that the cause of the collapse here is the weakness of the European authorities is total perversion of the truth. The waste and corruption is entirely home grown, and to its credit the government acknowledges this.

Still, the anti-European rancor, however hedged, has deleterious consequences. Firstly, it encourages the international speculators to assume that there are no financial teeth to the European declaration of solidarity, thus digging deeper the hole that the country is in. Secondly, it stokes the sentiment of perennial national victimhood emanating from the extreme right and left and finding fertile ground among the broader masses.

The worst service that one can render this society at the moment is to erect a wall of nationalist denial, under the pretense that the crisis is just an attack against "the people" by sinister foreign forces.

This, firstly, is a big fat lie. As it has emerged in the last few days these sinister foreign forces (a.k.a. Goldman Sachs) have been actively colluding with the Greek government in order to cover up the tyrannical debauchery of the Greek feudal elite. Secondly, if this notion takes root in the public mind (and it has not yet) it will simply render impossible even the mildest effort at reform. The syndrome of the "saintly nation" under attack from all points of the compass will again assert itself.

It was this mindless nationalist reflex to begin with which played a decisive role in the deterioration of public finances. For it caused the country's horrendous military spending, the highest in NATO. This is a factor that has not been touched at all by the foreign commentators. The colossal defense expenditure was fertile ground for the most insidious and vile corruption. The ministry of defense has been traditionally a worm-hole teeming with seedy contractors and middlemen trading on a generalized feeling, promoted by pseudo-journalists in their pay, of peril pressing on the country's eastern and northern borders. The result has been a military establishment loaded with useless hardware, a flabby, unwieldy squid of a thing capable only of putting on pompous shows. If, God-forbid, it ever came to an armed confrontation between Greece and Turkey, half of the country would be overrun in a matter of hours -Cyprus in 1974 is a telling precedent. Not because there are no brave and dedicated men in the ranks capable of the highest heroism. But because, as everybody knows, the whole set up is rotten to the core, geared to serving the private interests of an unscrupulous mafia an in no sense the real defense needs of the state. Lots of highly intelligent, conscientious and public minded persons can after all be found everywhere in the recesses, cracks and holes of the rickety and oppressive structure called the Greek state. But they have no impact whatsoever on its functioning.

It is highly significant that the very same "journalists" and opinion makers that were instrumental in fanning the nationalist hysteria since the disintegration of Yugoslavia in particular are the very same individuals beating the drums today against the EU and against the government which is trying, however ineffectually, to implement the restructuring that might make possible the European rescue.

An essential feature of that restructuring has to be the drastic reduction in defense spending, something which would in parallel necessitate a sincere and determined effort to resolve the differences with Turkey in the Aegean. This sincerity and determination has been lacking in official policy up to now, precisely because of the hegemony in the ignorant media and the venal political classes of the nationalist hotheads clamoring for confrontation with all and sundry. The present prime minister in times past has been one of the rare leaders pushing for enlightened accommodation in the international relations of the country, only to be ambushed by the pit-bulls of nationalism in his own party in particular. This is the moment to face these dogs down once and for all, if he summons up the requisite courage.