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Europe Daily Bulletin No. 11250
A LOOK BEHIND THE NEWS / A look behind the news, by ferdinando riccardi

Greece and the eurozone - is a real union still possible?

Reciprocal effort. Calling on Greece to meet its commitments is a necessary step, but it is not enough. Also to be taken into consideration are its history, its millennia-old civilisation and its anomalies.

Greece, for its part, has to understand that the other members of the eurozone are not able at present to shoulder its debts. What the Greek authorities are looking for is unrealistic, and their idea of seeking war reparations from Germany (estimated by Syriza at €162 billion, half of the current Greek debt) is politically gauche and legally inept as, at the time, Greece, like all the other countries, formally gave up any such demand.

Shared responsibility. At present, the search for reasonable agreements must take account of the shared initial responsibilities when Greece joined the eurozone. The other candidate countries at that time and the EU institutions should not have backed Greece's candidacy and, later, when faced with the consequences of the initial mistake, negotiation of that country's exit from the single currency should have been negotiated as soon as the first insolvencies appeared (relying on the lawyers to draft the appropriate formulae to make this conclusion possible).

Initial error. Why should Greece never have joined the eurozone? For its own good. Because its history, its structure, the way it operates were not adapted to it from a dual point of view. Its richest citizens, that is, its famous ship owners, active across the globe, were not subject to any national taxation. Similarly, the tax regime for the Orthodox Church was roughly the same, yet its wealth is virtually equivalent to the country's total debt.

Joining the euro increased the difficulties. Several political figures promised useless public jobs to people promising them their vote; ERT radio and television were too generous, and more. It could be summed up by saying that these were national issues in which the EU as a body and the other member states had not to be involved. That is correct in principle but, if one is asking the other member states for money, they at least have the right to be made aware of the real situation.

Budgetary difficulties for all. True, the current Greek political forces are not responsible for previous errors and expenditure but nevertheless the country has to face up to the situation. Indeed, overall debt continues to grow although the other member states have several times agreed on reductions. It cannot be asked of these countries that they continue to finance this debt given the budgetary difficulties most are experiencing.

Complicated exit. Is the solution, then, the Greek exit from the eurozone? Easy to say, very difficult to achieve. In an interview with Italian television, Greek Finance Minister Yanis Varoufakis said that the issue of his country's debt is part of the broader rejection of the policy of austerity in the eurozone in general. “The euro is like a house of cards; if you take away the Greek card, the others will collapse.” This is a view not always shared, particularly by the countries that are themselves in difficulty and which do not conceal their lack of enthusiasm for measures that would worsen their national budgetary deficits. Furthermore, unofficially, the inefficiency of some aspects of Greek management of the state budget, particularly in terms of taxes, has been highlighted.

Greece, the Eternal. No matter the difficulties Greece faces, how could Europe and the world forget what they owe this civilisation and what it represents for humanity? For Dante Alighieri, Ulysses is the man who led humanity to knowledge of the world; Lord Byron died for Greece; for centuries, millennia, Greek culture has lit up our planet.

Today it is up to Greece to choose. If it wants to remain in the eurozone, it will have to accept and abide by the rules, in the awareness that the way a united Europe works implies a gradual ceding of national sovereignties to the EU. It should be Greece itself that asks to leave the euro. It will, of course, remain part of the EU, no matter the legal complications. (Ferdinando Riccardi)

 

Contents

A LOOK BEHIND THE NEWS
EUROPEAN PARLIAMENT PLENARY
SECTORAL POLICIES
EXTERNAL ACTION
ECONOMY - FINANCE
COURT OF JUSTICE OF THE EU
INSTITUTIONAL