Germany should look to its past and ensure that Greece does not face a humiliating exit from the eurozone.
Many in Europe – particularly in Germany – wonder why they should continue providing financial support to a country that has failed to honour its commitments to its partners; a state which is an international laggard in all major indicators, including competitiveness, innovation and transparency. Such objections are understandable but mistaken. Europe stands to lose as much as Greece itself from an exit of the latter from the eurozone.
It is not just the spreading of the virus of uncertainty to the other countries of Europe’s southern periphery, the repercussions on the northern European economies and the impact on the process of European integration that began from the ruins of the second world war. If Greece falls, Cyprus will, too, due to its exposure to the Greek economy, and Europe will lose two outposts in the eastern Mediterranean, which have lost none of their significance on the international power chessboard.
Greece is also Europe’s first barrier to the tidal waves of illegal immigration originating in Asia. It has lifted the burden for everyone, with very little assistance. If the EU thinks that we are not really doing a great job guarding its frontiers, wait and see the chaos that will ensue when Greece is out of the way.
A third good reason to bail out Greece is to prevent its Balkanisation, which would result from the extreme poverty and the inability to import medicines, fuel, and food after a disorderly default. Unlike Argentina, Greece does not have its own currency to devalue. We will have to introduce a new currency from scratch, with no exchange value whatsoever, and no means to support it, since Greece is not a net exporter of raw or manufactured goods. The political system will collapse and even democracy will be in danger. The EU and Nato would derive no benefit from a new source of tension in the Balkans, which they have fought to stabilise in recent decades. It would be a grave mistake.
Moreover, our European partners should not forget that certain syndicated interests that may have succeeded in preserving their privileges and tax evasion may still be rife in Greece, but the majority of the Greek people have made huge sacrifices, in order to shoulder the harshest fiscal consolidation programme ever implemented in a developed country. A Greek exit from the EU would be tantamount to betrayal of all those who have foregone so much.
The same goes for a large part of the political system. Greek politicians may have proved incompetent but no one can accuse them of ulterior motives. The two-thirds majority of MPs who voted for the new economic memorandum knew they were signing the end of their political careers. Papandreou and Samaras, the leaders of the two major parties, have risked their dissolution by backing the country’s stay in the eurozone, against populist voices promising that everything will be solved if Greece starts printing valueless drachmas. All opinion polls show that Greeks, despite their sacrifices, vow to remain in the eurozone. The images of riots and violence relayed to the end of the world by the media are the work of a small minority and police incompetence. When the world sees 100,000 rallying in Athens, what they don’t see is the 4 million other Athenians who are not rallying, or burning, or rioting; just trying to survive and make ends meet, in a country where nothing really works anymore.
Europe can bypass the proven incompetence of Greek politicians with safety valves, such as the broadening of the powers of its Task Force for Greece, the provision of technical aid or the tying of the disbursement of bailout instalments to tangible progress in reforms. From a purely realist point of view, this is a much better choice than letting the country go down.
But there is also an ethical argument: modern Europe exists thanks to ancient Greece and modern Greece exists thanks to the European powers that guaranteed its independence in the early 19th century. Since then, Greeks have more than repaid their debt. They fought to defend western ideals and interests in every corner of the world – from the trenches of Europe, to the hills of Korea and the deserts of the Gulf. When Germans fell into the darkness of Nazism, when the empires of old (Belgium, Netherlands, France) surrendered within days, only Greeks and Brits were left standing. Ask those who were cowering from the pounding of Luftwaffe in the tube stations of London, during the long winter of 1940, and they will tell you that the only pieces of good news they were getting for months, were coming from the Greek mountains.
Germany knows full well that national humiliation can backfire and ought to remember that when it found itself in need, its own debt underwent a haircut and its mistakes were forgiven. The Germans are not known for their diplomatic and political foresight and have paid for this dearly in the past. Let them not drive all Greeks, conservatives and liberals, supporters and opponents of austerity, innocent and culprits, to unite against them.
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