Poor old Greece wants the EU to stop predating on its economy with unsustainable loan arrangements. Poor old Germany doesn’t want to be out of pocket due to the Greeks. The Greeks want to believe that the Germans and the EU are cheating them out of their future. The Germans want to believe that the Greeks are cheating them out of money they made through hard work. The internet knows this already, so why am I talking about it?

Because there’s something else important here that I haven’t seen clearly articulated yet, though many bloggers have come close. Those loans were originally made to Greece not by governments, but by private banks. Those banks are considered too big to fail by their host countries. When it became clear that the loans were unsustainable, the host countries bought that debt to prevent the banks from toppling. The banks knew this would happen, so they had extended themselves as far as they could.

By the time the European governments were left holding the bomb, the banks had already made out like bandits. All that phony risk had turned into reward. Now Greece and Germany are both left with empty pockets pointing at each other while the people who actually destabilized Europe walk away scot-free.

Now Greece is on the hook, and will be so indefinitely until it abandons the Euro. Germany is next in the firing line. And as soon as the Euro looks fragile the banks of the world will bet against it, make it harder for Germany to borrow or manage the foreign debt they’ll be left holding. The banks will drain its economy so long as an excuse persists. Either way, somebody will take it in the neck, and it won’t be the banks.

So far as I’m aware, this is common knowledge in finance-land. Many of the rest of us have figured it out too. Some of us have talked to people working in banks and have heard clear accounts of how the Greek scam was perpetrated. Yet the governments concerned will never admit that they have been impoverished in this way, or reveal the risks they still face. Why?

Because, I’d propose, we are involved in what you might call a bank war. With the rise of China, control of the world economy is up for grabs. Everyone is letting their banks duke it out, because they believe that whichever governments host the winning banks will be the ones holding onto a viable tax base and the reins of power. Those governments that have invested heavily in the power of their banks, like the US, Britain, and Germany, can never admit to have handed economic control to those organizations, because that would put the brakes on their own banks’ progress.

Many of you may read this interpretation and consider it too charitable. Plainly there are a lot of people in politics and finance who are simply out to get rich. Others might take issue with the term bank war, and doubt whether anyone articulates it to themselves as such. But the fact remains that politicians in these countries consider their finance sectors so important that they cannot permit them to fail. They see the prosperity of their entire country as bound up in the health of their banks. Not their factories, or their farms, or their people, but their banks. Healthy banks, they reason, make everything else possible. Except of course, this is backwards. Banks contribute nothing to the world economy but a set of leaky pipes for moving funds from place to place. Luxembourg, for instance, is not a healthy country. Luxembourg is a healthy parasite. And when everyone is a parasite, everyone is dead.

This reversal of priorities, I’d propose, is what defines a bank war. You can’t be in a bank war and call it one. Because at that point it becomes a war. You can only be in a bank war while you’re terrified for your economic well-being enough to turn your tax-paying citizens into collateral damage while refusing to acknowledge that this implicitly constitutes a form of conflict. Which is what is happening in Europe.

Whether you buy this definition or not, there is a problem here. The power that has been handed to the banks is not coming back. And the banks have little or no interest in supporting the governments that host them. What western governments are getting instead of a grip on global power is having their economic might stripped by the depletion of the middle classes that fuel them and keep them prosperous. As is becoming clear to everyone at this point, austerity policies achieve nothing except concentrating wealth in the hands of those who already have it.

Western governments don’t think they can stop, though. Because to stop is to lose the war. And the banks, meanwhile, will suck up as much money as they can see, because that’s what they do. Which is unfortunate, because there is no way to win a bank war. Money that gets locked in the hands of the wealthy stops functioning as money. It becomes a lifeless peacock’s tail on the backside of the global economy. That means that plutocrats and oligarchs have to struggle harder against their opponents for less gain. They have to watch the shadows ever more closely because the knives come out everywhere. Everyone loses, including the banks, because the power they’re left with can’t be used for anything except gripping tightly. Welcome to the Malthusian trap where the only thing more dangerous than being a peasant is to be royalty.

The current crisis in Europe is a farce. Everyone knows where the money went. Governments in Europe need to come clean, rein in their bankers, and step out of the bank war, despite the frightening costs entailed. Not because of compassion, or justice, or fairness—nice aims though they may be. They need to do it because the alternative cost to everyone, including themselves, is far higher. In the choice between recession and ruin, recession is the better bet.

(My first novel, Roboteer, comes out from Gollancz on the 16th July.)