Greece and the European Union

Greece and the European Union

Greece’s Debacle

A friend sends James K. Gal­braith‘s thought­ful arti­cle, “From the Destruc­tion of Greece to Democ­ra­cy in Europe” (Boston Globe, 22 August):

Last year’s third bailout of Greece, imposed by Europe and the Inter­na­tion­al Mon­e­tary Fund, does to Greece what Ver­sailles did to Ger­many. It strips assets to sat­is­fy debts….a quag­mire of graft to sup­port an illu­sion that Greece could “com­pete” as part of the euro. Already in 2010 the IMF knew it was break­ing its own rules by pre­tend­ing that Greece could recov­er quick­ly, sus­tain a huge pri­ma­ry sur­plus, and repay its debts….

Europe crushed the Greek resis­tance in 2015. Not because Wolf­gang Schäu­ble, the Ger­man finance min­is­ter, thought his eco­nom­ic plan would work; he can­did­ly told the Greek finance min­is­ter, Yanis Varo­ufakis, that “as a patri­ot” he would not sign it him­self. But Ger­many wants to impose its order on Italy and on France, where civ­il soci­ety con­tin­ues to fight back….Greece was giv­en col­lec­tive pun­ish­ment as a les­son. It was done to show that “there is no alter­na­tive.” It was done to stop any oth­er attempt to devel­op, artic­u­late, and defend a more ratio­nal pol­i­cy. It was done to pro­tect the pow­er of the Euro­pean Cen­tral Bank, the Ger­man gov­ern­ment in Europe, and the pol­i­cy-mak­ing author­i­ty, in face of a long record of fail­ure, of the IMF. Greece is now a colony — the polite say “pro­tec­torate.”

The Downward Spiral

My friend describes this as “a slam-dunk on the Euro­pean Union that exceeds any­thing Nigel Farage said.” (Farage is the UK Inde­pen­dence Par­ty leader who helped win the Brex­it vote on June 23rd.)

Gal­braith prais­es Varoufakis’s Democ­ra­cy in Europe Move­ment (DiEM25)—which sounds odd­ly like Farage’s Europe of Free­dom and Direct Democ­ra­cy Group (EFDD), but isn’t. It is sup­pos­ed­ly “a transna­tion­al Euro­pean pro­gres­sive move­ment” that restores nation­al vot­er con­trol with­in the EU. But as the author seems to admit, DiEM25 has as much a chance as Bernie Sanders’ “Our Rev­o­lu­tion.” The EU is not salvageable.

We think of Greece as the his­toric cra­dle of lib­er­ty. Once pros­per­ous, her throat was cut by the social­ists who stayed in pow­er by dis­pens­ing ever greater largesse, and through the super­state they invent­ed, the Euro­pean Union.

Greece joined the EU in 1981, and adopt­ed the euro in 2001. She was in time to be among the first wave of coun­tries to launch euro ban­knotes and coins on 1 Jan­u­ary 2002.  Amid the more or less free-trade com­mu­ni­ty and dur­ing 1980s pros­per­i­ty, Greece did very well for her­self; in the 1990s, some­what worse; after adopt­ing the euro, dismally:


Top: Nation­al debt as a per­cent of gross domes­tic prod­uct for 1995-2015 for Greece (blue), Italy (green) and Ger­many (orange). Above: Greece GDP per capi­ta adjust­ed for pur­chas­ing pow­er par­i­ty (PPP). (World Bank)

Churchill’s Hopes?

A col­league who read all this asked: “Would Churchill’s  goals for peace in Europe be achieved if every­one left the EU except Ger­many and France? My under­stand­ing is that he was moti­vat­ed not by a sin­gle Euro­pean state. He meant to elim­i­nate sev­en­ty-five years of ani­mos­i­ty and war between those two powers.” 

It is not pos­si­ble to con­flate Churchill’s time with ours in that way. He cer­tain­ly did not believe that the path for­ward after World War II lay in a fed­er­al union. He said so plain­ly enough. (See “Churchill’s View” here.) The ideas of sov­er­eign­ty, democ­ra­cy and free trade—which Churchill espoused—are ever­green. Open bor­ders, a Euro­pean army, and unelect­ed bureau­crats writ­ing the laws of nations are not.

At the moment France is itself a pos­si­ble Exiter. If the Nation­al Front gets in they will blow the EU up. They are far more extreme than the UK Inde­pen­dence Par­ty (or Trump). We must hope that mod­er­ate, sen­si­ble heads pre­vail. Let the EU super­state evolve back to a free-trade Euro­pean Eco­nom­ic Com­mu­ni­ty. That is what the nations and their cit­i­zens vot­ed for back in the 1950s through the 1970s.

But the Greek deba­cle is noth­ing com­pared to what’s com­ing in Italy and Spain. I fear the world is in for upheavals that may prove impos­si­ble to han­dle by the cur­rent crop of plat­i­tudi­nous, prin­ci­ple-less, self-enrich­ing, polit­i­cal­ly cor­rect nation­al lead­ers. And then what? Who knows? Those of us who will be dead may relax. As for the rest of you, good luck.

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