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What now for Greece and its euro membership? What now for Greece and its euro membership?
by Christos Mouzeviris
2012-05-16 07:49:51
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Lots of speculation during this week about the future of Greece in the eurozone. The country failed to form a government and there are many parties now in the Greek parliament, notably Syriza and its leader Mr. Tsipras that want to reverse the bail-out deals that the former government has signed.

That of course caused an uproar among many other European governments notably in Germany. Many have threatened to withdraw any further funds to Greece, others predicted the country's exit from the eurozone. A number of Germany's and EU officials mentioned that solidarity works both ways and if Greece wants to receive help, it must continue the austerity program and commit to what it agreed in order to receive more funds.

Yes but in what price? The euro and everything that the EU represents and promotes must be for the betterment and benefit of the people of all EU states. Right now what we have in Greece is a total collapse, social, financial and even moral. In a country with very few suicides per year, they now became a common occurrence. Austerity hasn’t worked in Greece at all, it only put the Greek people in a terrible position to repay debt that was deliberately thrown on to them. Because the bubble economies that Greece, Ireland and Spain had formed was a trap. The markets went to formerly poor countries and threw cheap money in their economies, knowing that people would go mad; as they did. They then would create a crisis, and while those nations would be heavily indebted the lenders would make profits with the loan repayments. Something similar happened Latin America. I am just furious that the European elites have allowed this to happen in Europe. 

 Austerity would be good if it was combined with investments, cut the salaries but invest in creating jobs and new industries. So far only the first has happened and it is disastrous for the Greek people. The nation’s pride and confidence is at the lowest point and we are being treated like the Jews were before WW2. Apart from the slander and the fact that we are being used as the scapegoat for the eurozone's woes, there are many reports among the Greek diaspora of discrimination and abuse of the Greek ex-patriots, simply because they are Greek. Notably in countries that “give their taxes to the corrupt and lazy Greeks,” like Germany, Austria, Finland and Holland.  Not a great example of European solidarity is it? It is a shameful act and those responsible are the European elites who allowed this to happen. They are using the Greeks as a scapegoat for their failures.

Because it is their failure. The eurozone was flawed by its birth, it was more of a currency union than a monetary union. Our leaders knew that, but still they went ahead with it. Thus the euro became an ambitious project and a symbol for Europe, but to the expense of the ordinary citizens. What good is to a European worker to have a symbol of "European unity," when he has to pay such a high price for it? What people need is to be convinced that if they take the austerity, better days will come. Right now Germany and the Greek government insist on more austerity something that the Greek households can not take any longer. If they announced a program for recovery and growth, or at least a road map to end the austerity and begin a relief process, I am sure the Greek people would respond more positively. After all the Greeks showed their support in a recent poll for the euro, with a 75% saying they want to keep the common currency.  We saw none of that so far.

And if you think that the Greeks deserve all this because they were irresponsible, well that is only true for the corrupt governing elite and their accolades. Is it fair to put the ordinary citizens under such a harsh ordeal, just to punish the incompetence of their past governments? How could the Greek public have known that the country was not fit for the eurozone and that our government lied about the country's finances to enter the eurozone? They lied to us and apparently they lied to the rest of Europe, but personally I doubt that European governments were ignorant about it. It is well known that the EU Commission knew but did nothing about it. So does the blame fall only on Greece's shoulders?

Our leaders created the euro with many flaws and occasionally all EU states at some stage have bended the rules. The first to do so were Germany and France. As for the debt, it has been accumulated from the exposure or the European banks, mainly the French, German and British to the toxic debt of the USA. I will remind everybody that Germany’s economy was in tatters after the re-unification and its recovery was partly based on high inflation of those nations that now are in debt and crisis and Germany’s trade surplus against those countries. In other words, our then booming economies contributed to the fixing of the then limping German economy, only to be forced now into an austerity.

Greece’s expenditure is also wasted in its defence and weaponry that it buys. Mainly from Germany, France and the USA. So while the Germans are giving Greece money to “save us” they are happy that we buy their tanks and submarines to protect ourselves from where? The Turks, a NATO ally of ours. While Europe could easily form a common defense policy to protect the borders of Greece and all the outer borders of the EU. But imagine how much some will lose out, if they stop making corrupt dealings with the Greek government? We had the arrest of a former Greek minister, Mr Akis Tsochatzopoulos recently, because he was ordering submarines from Germany and the US that we did not really need.

The Greeks were blamed for overspending, but it was German cars that they were buying. So by overspending, they were actually supporting the German economy. Perhaps if they did not have developed this bad habit, Germany's economy would not have benefited so much. Besides, it was not only the Greeks who went on a spending spree, but the Irish, the Spaniards and the Portuguese fell in that trap too. Well all of Europe was overspending in fact. But the smallest get the spanking always!

 There have been many scandals of multinationals, among them many German like SIEMENS, of tax evading in Greece. But it is the poor Greek tax payer that is called to pay his taxes while the multinationals, who obviously owe more to the Greek state do not have to face the same rules. Not very fair, so is it any wonder that the people protest in Greece and in Spain?

So how can we solve the crisis when it is Germany again who opposes the eurobonds, a more viable solution to save the euro. They fear that this will harm their competitiveness, so instead they want to impose the new Fiscal Treaty on others. Now partly I agree with the Treaty, as it is good to control how much does a country borrow or spend. We need fiscal discipline and unity in the eurozone. But is it punishing states or controlling how much a country borrows enough to solve the problem? And as it happened with former existing Treaties, it was actually Germany and France who broke the rules first. Who is going to control Germany when it breaks first this treaty too?

The solution would be, if our leaders want to keep the euro to have a full fiscal union, but that is what Germany and many other "core" European countries oppose for the moment.  Bailing the weaker states out with high interest is much more profitable for them, because interests have to be repaid. They claim that they keep the pressure on Greece to force them to reform. In my opinion they are doing more harm than good. The Greek public opinion is turning against the austerity, the EU, Germany and even the majority for the moment favors the euro, if they continue with the austerity I am sure that they will eventually give this idea up too. Greece does not need austerity, it needs systemic reforms, it needs to modernize and update its taxation system that is so complicated and riddled with red tape, that no one really knows who is doing what. It needs to create jobs, cut down on its public sector and stream line its economy. Not have its population starving and being unemployed.  

If the Germans and Mrs Merkel continue to insist on such strict austerity measures then I think it is time to call the euro project a day. Let Greece and then perhaps Portugal, Spain, Ireland and even Italy leave the common currency, devalue their national new currency and be independent from Germany and the rest of the "core" states for a few years. After they stabilize their economies and fix their finances they can rejoin. Germany has highjacked the eurozone and the European project and they are trying to repeat what they did in Eastern Germany on Greece; fine they were successful, but can we also get the factories and development to go with it?

The euro is a great symbol of unity and of prestige for Europe. But keeping it alive to the detriment of the people is not justifiable. Either do what it needs to be done or let countries to leave for a number of years. And that comes from a staunch pro-European and supporter of the common currency. I have always supported the euro, but like everybody I was not aware of its faults. I trusted that our politicians knew what they were doing when they were launching the euro. Obviously they did not.

Austerity would be good if coupled with growth stimulus and funding. Just austerity, and in its harshest form, the harshest we saw in Europe for decades, only turns the public opinion’s against the euro or the European project and it is simply scandalous as all this is happening to save the banks and the please the Markets. Nothing has been achieved in Greece for the past two years of austerity apart the rise of the far right and the far left. That makes it harder to cooperate and find a solution both within the Greek government and Europe. We need to start seeing investments now in Greece, but all we get from “our partners” are threats! Hopefully France's new President Mr. Hollande will be able to bring some reason in EU and its elites, but I am not holding any high hopes until I see some action.

So even if I support the euro, if it means that the Greeks will have to suffer more cuts and without a plan for recovery, I suggest that Greece should exit the single currency. We should rejoin only when the rich states have eventually decided to create a true fiscal union, when they fix the eurozone, heal its flaws and when they accept new members, they have to make sure that everything is in order, both in the new member’s books and in theirs. Expand the EU or the eurozone with all costs is not working anymore. I say yes to more integration and monetary union, but only if our government decide to do what needs to be done.

*************************************************************************

Christos Mouzeviris is the writer of the blog: The Eblana European Democratic Movement 
 

 


   
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