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.
Posts Tagged ‘ Greece ’
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.