European Student Think Tank

South­ern Europe is burn­ing. This crisis has turned out to be the great cata­lyst expos­ing national ills of pre­vail­ing polit­ical and bank­ing sys­tems. Con­ven­tions were over­thrown and polit­ical estab­lish­ments dis­mantled; yet, Europe seems to be on hold, or in slow motion at best, wait­ing the Ger­man elec­tions. In the mean­time, a toxic envir­on­ment is breed­ing, European cohe­sion is eroding.

Ger­many has played a major role in every dis­cus­sion revolving around the cur­rent Greek budget­ary crisis. Not only has the coun­try been singled out as the biggest cred­itor, and more gen­er­ally as Europe’s pay­mas­ter, but it has also come under severe cri­ti­cism for enfor­cing an export driven eco­nomic policy that con­demns its European part­ners to neg­at­ive trade bal­ances with Ber­lin. How­ever, is that cri­ti­cism fair? Prob­ably not.

Ger­man fin­an­cial aus­ter­ity demands have dom­in­ated the debate on how to save the coun­tries hit hard­est by the euro­zone crisis: Greece and Por­tugal. How­ever, des­pite severe cuts in the social spend­ings as well as massive lay-offs, res­ults are mea­gre and new bail­out pay­ments are dis­cussed. There is no doubt that aus­ter­ity is essen­tial for a bal­anced budget, but starving the eco­nom­ies of Greece and Por­tugal is not going to help at all. What the EU needs to do is rebuild their economies.

The Greek debt crisis illus­trates more than ever that the des­tinies of European nations are related to and depend­ent on one another. EU mem­ber states find them­selves with little choice but to invest in Greece to keep the Union from col­lapsing. And with good reason, because the fin­an­cial crisis goes bey­ond eco­nom­ical devel­op­ment and national budgets. Our way of life is at stake.

At times it feels like the story is repeat­ing itself over and over again: The EU helps Greece re-finance its loans, and in return asks the coun­try to reform and mod­ern­ise. Then Athens announces that meas­ures will fail to bring about the desired res­ults and the EU urges the gov­ern­ment to take even more drastic actions. To no avail. It’s time to let Greece default. Any other solu­tion will fail and be more costly.

Ten­sions in the Eastern–Mediterranean area are escal­at­ing: A short time ago, Cyprus begun to con­duct drilling for oil and gas in its exclus­ive eco­nomic area, facing the con­tra­dic­tion of Tur­key. Tur­key claims a share in the “con­tro­ver­sial” Block 12.

The EU stands at a his­tor­ical cross­roads today and it has to make a dif­fi­cult choice. Its decision could send it on the path of ever-closer cooper­a­tion and prosper­ity, or ini­ti­ate a very slow pro­cess of dis­sol­u­tion. The prob­lems Greece faces today are thus much more sig­ni­fic­ant than they seem ini­tially and require more than a tech­no­cratic approach to be solved. What Europe needs is some­body with a vis­ion, a truly European leader.

This Wed­nes­day the Greek Par­lia­ment backed the required aus­ter­ity meas­ures and man­aged to post­pone a default on debt. But a post­pone­ment it is – a default is inev­it­able and so is the sub­sequent tragedy.

Past and present show that not just polit­ical exclu­sion, but more so eco­nomic under­per­form­ance can lead to pop­u­lar protest and rebel­lion. These les­sons should be applied to Spain and Greece, where Europe’s eco­nomic crisis is hit­ting hard­est. The pos­sib­il­ity of polit­ical viol­ence in South­ern Europe’s poorly per­form­ing eco­nom­ies can­not be excluded.

Greece, Ire­land, now Por­tugal. The euro­zone crisis con­tin­ues and wor­ries per­sist that the bail-out pack­ages provided by the EU and the IMF won’t solve the prob­lems of the peri­pheral euro­zone coun­tries. Can privat­isa­tion pro­grammes and cuts in social spend­ing really save those crum­bling eco­nom­ies? I would not bet on it and pre­pare for the worst.