The Greek vote is not enough. One only has to look at the reality to see that the optimism if not enthusiasm caused by last weekend's events were somewhat on the excessive side. The result of the Greek vote has obviously not resolved all problems (see yesterday's column). No doubt the EU was in need of this fresh wave of optimism, and who can blame it? But we mustn't forget the reality of the situation. Let us begin by looking at the choice made by the Greek people.
It is not surprising that a steadfast majority wants to remain in the eurozone. One only has to remember that, if European funding were to be broken off, the Greek State would no longer be able to meet its everyday financial commitments as of next month. Funds available were estimated on 11 May at €3.8 billion. This week, it seems, they are around €2 billion - just enough to pay the salaries of civil servants and pensions (already reduced) until July. The European commitment amounts to €130 billion, to be paid if Greece meets the conditions set. It is therefore not surprising that a majority of the population voted in favour of mutual commitments. Now it is up to the two sides to keep those commitments. Review is planned, as we know, of the timetable for Greece's commitments but it is out of the question to renegotiate what is essential. Eurogroup President Jean-Claude Juncker has called for a new government to be formed as soon as possible, a government that will implement the programme by which Greece and the eurozone have pledged to abide. Forming a government should not present much of a problem - for the rest, well, we shall just have to wait and see. Speaking on behalf of the IMF, Christine Lagarde has said it is necessary to “reset the meters” with the Greek authorities as it is not obvious what has been achieved and what has been complied with over these past six or eight weeks.
To put it briefly: the Greeks have expressed their desire to remain in the eurozone, which is important. Now they must prove they are determined to comply with eurozone discipline and that they are able to do that. Inquiries and analyses carried out on the spot - concerning tax fraud, the number of civil servants and the inefficiency of the administration - show that, despite the efforts being made by political officials, progress is for now very modest, if not practically non existent.
What it will cost the other member states. One aspect all too often left unmentioned is what Greece's bailout will cost the other eurozone countries, nearly all of which are seeking to reduce their own budgetary deficits with often very severe austerity measures. This point is carefully circumvented by those who support unconditional (or almost unconditional) funding for Greece, but it is something that those in charge of national budgetary balance and their European supervisors cannot overlook.
MEPs have generally spoken out in favour of generous indulgence of Greece's difficulties, albeit calling for in-depth reform, and yet the financial burden that this will impose on the other member states is never mentioned. The general impression one has is that one continues to wrap up a country's possible exit from the eurozone and its exit from the EU in one and the same bag when, in fact, the two things are radically different.
Austerity must also cover external spending. But let us leave the case of Greece to one side for a moment. It would of course be absurd to say that Greece is responsible for all the budgetary imbalances that have to be righted. We all know that most member states are currently compelled to carry out austerity policies, involving significant cuts in spending. One could say that some of those measures are only right and proper as they allow waste and abusive spending to be overcome.
The principle of austerity and doing away with pointless or wasteful spending must cover internal as well as external expenditure. The EU is naturally obliged to meet certain external commitments, especially when it comes to providing aid for poor countries but, as in domestic spending, there is just as much imbalance and wastage. So the watchwords must be vigilance and caution.
Philippe Boulland MEP, has reported on the meeting of the EU-Madagascar Group of Friends of which he is chairman, hailing the fact that the multiple players present made it possible for good questions to be raised, for example: When will European funding, which accounts for 50% of the Madagascar budget, be made available? And to whom will such funding be distributed? Now it is obvious that the EU cannot bear the cost of half a third country's budget, whatever the reciprocal links between that country and the EU might be.
The results of a survey in Nigeria show that that country is the eighth largest world producer of oil, and that the proceeds of this should allow its 130 million inhabitants to enjoy extraordinary well-being. However, there is all-consuming corruption in the country. The population is therefore very poor with unemployment of between 80 and 95%. It is not money that Nigeria needs but support of another sort. The EU wants to amend its generalised system of trade preferences in favour of the poorer countries, excluding the so-called emergent States (see EUROPE 10633). By doing so, exports from poor countries to the EU would be facilitated - and that is the right direction to take.
Europe must react to unjust or excessive accusations. At the same time, information filtering down from the G20 meeting in Los Cabos (Mexico) is full of reproach towards Europe. I am not referring to the official meetings where the language of diplomacy and compromises in general are the wont, but to declarations made on the sidelines by some of the participants.
World Bank President Robert Zoellick sets the tone by saying G20 leaders look at Europeans with a mixture of frustration, confusion and disdain. Indonesia's President Yudhoyono considers the difficulties encountered by the euro are responsible for the economic slowdown forecast in Asia, and says: “I trust our European colleagues will come to some agreement on measures to be taken. No action impacts on all of us.” Hwang Jin-woo, Vice-President of the Seoul Research Institute, explains: “We invested in solar energy because Europeans are the main clients for solar equipment. Korea wants a solution.” The same accusations and grievances were expressed by President Obama during his recent meeting with the highest European authorities: - in the financial sector in particular, Europe should continue to exacerbate its own position to the benefit of the others, so that it does not cause them difficulties; it should accept the behaviour of the financial centres of New York and London against the euro; and it should not call for equality in securities and behaviour in trading areas. To this, the response should be a resounding refusal - without complex and without hesitation.
(FR/transl.jl)