Google+
Close

The Corner

The one and only.

Greece & Democracy



Text  



One of the more desperate arguments rolled out by eurocrats on the defensive is that the EU is all that stands between Europe and a rerun of, say, Verdun. French foreign minister Alain Juppe came out with a classic of the genre not so long ago: 

 ”The dissolution of the eurozone is not acceptable, because it would also be the dissolution of Europe. If that happens, then everything is possible. Young people seem to believe that peace is guaranteed for all time.”  

Leaving aside the fact that the EU would almost certainly survive the death of the single currency, this argument misses the point that, if anything is likely to increase national tensions within Europe, it is forcing the citizens of that continent’s very different nations to share a financial straitjacket.

 

Take this paragraph from the latest piece by Ambrose Evans-Pritchard:

Germany’s EU commissioner Günther Oettinger said Europe should send blue helmets to take control of Greek tax collection and liquidate state assets. They had better be well armed. The headlines in the Greek press have been “Unconditional Capitulation”, and “Terrorization of Greeks”, and even “Fourth Reich”.

So much for “ever closer union” as the source of ever closer friendship.

Agree or disagree, the whole of Evans-Pritchard’s column is well worth reading. I’m no fan of the way that Greece has been run, to put it mildly (and nor is Evans-Pritchard), but there is, for example, quite a bit to this:

Let us be clear, the chief reason why Greece cannot meet its deficit targets is because the EU has imposed the most violent fiscal deflation ever inflicted on a modern developed economy – 16pc of GDP of net tightening in three years – without offsetting monetary stimulus, debt relief, or devaluation. This has sent the economy into a self-feeding downward spiral, crushing tax revenues. The policy is obscurantist, a replay of the Gold Standard in 1931. It has self-evidently failed. As the Greek parliament said, the debt dynamic is “out of control”.

So what next? Evans-Pritchard is (as I am) an advocate of dividing the single currency into ‘Northern’ and ‘Southern’ euros. He clearly doesn’t believe that this divorce would be painless, but he’s right to discount some of the wilder claims of the misery that such a split would suppposedly bring in its wake. He then reminds his readers of the core political problem that lies at the heart of this crisis:

[The EU] has already pushed its ambitions beyond the tolerance of Europe’s historic states and cannot be made democratically accountable. The new fact of recent months is that German society has begun to discern a clash between its own democracy and the fiscal drift of EMU. The two are seen to be in conflict for the first time. Germans may be forced to choose. The outcome to that is far from clear.

He’d put France in the southern euro. I’m not so sure about that, but where he is (I reckon) right is this:

The status quo, however, is not acceptable. EMU’s debt-deflation strategy has trapped half of Europe in depression, with youth unemployment reaching 46pc in Spain and no way out for years.

Consider, for a second, what the political implications of that will be, repeated across the southern and western rim of the continent, and sustained for a few years. There are a few hardy optimists who can find some things to hope for from the Arab Spring, but even they would be pushed to find much upside in a future European Winter



Text  


Sign up for free NRO e-mails today:

Subscribe to National Review