By Stavros Lygeros
Greece’s crisis has highlighted in a dramatic way not only the obsolescence of our own economic growth model but also the European Union’s inherent weaknesses.
European unification has banked on the waters remaining as calm as they were when the EU was first conceived and the bloc’s naive elite ignored one of life’s rules, namely that calm is invariably followed by a storm.
The EU is not a federation and the notion that each member state will look out for its own interest is part of the game. On the other hand however, a union of nations, and even more so a monetary union, also presupposes a certain degree of solidarity. Monetary integration without fiscal integration, without political integration, is a contradiction in terms. It is akin to putting the cart ahead of the horse. The fathers of the EU failed to create a mechanism to bail out members in trouble, and especially when their troubles have made them the black sheep of international markets.
The Maastricht Treaty and the clout of the European Central Bank did nothing to resolve this contradiction. On the contrary, they rendered the eurozone even more inflexible.
Furthermore, the EU’s treatment of Greece has been yet another sign of weakness and the stronger member states took advantage of this institutional void and the amateurish handling of the crisis by George Papandreou’s government in order to withhold support. Solidarity does not mean help with no strings attached, but without solidarity the EU has no future.
The eurozone effectively tossed Greece to the market wolves, ostensibly to teach it a lesson. Instead of helping strengthen its weakest link it mortgaged the country’s recovery and allowed Greece to borrow at exorbitant terms to the benefit of speculators.
Even when the government adopted tough measures, Germany merely hummed and hawed. Yesterday’s announcements of support were more about protecting the euro than a practical expression of solidarity with Greece.
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