In the plot line of the European drama, the predicament of the Greeks is actually a sideshow, and so the deal will do nothing to alter its fundamental contradictions. These stem from the EU’s inability to impose a Teutonic political discipline on the other debt-wracked nations of Portugal, Italy, Spain, and Ireland. This is why the European experiment is doomed to fail—unless the nations of the Union quickly find the willingness to surrender their individual sovereignty to Brussels and cede control of their economies to the Eurocrats.
As for the Greek deal, the unity government will face this precise dilemma in short order. The Papandreou government has fallen because it could not muster the political strength to convince the Greeks to swallow the EU bailout castor oil. The saber-rattling by Sarkozy and Merkel last week in reaction to Papandreou’s threat to submit the deal to a direct vote of the Greek electorate revealed the desperation of the French and the Germans to preserve the Euro experiment at all costs—even at the cost of undermining the democracy of one of its members.
The mind-numbing fact is that no one is under any illusions that the Greek bailout deal will actually help turn its economy around and place its finances on a sound enough footing to actually be able to pay off the newest restructuring of its national debt. The stock markets may fool themselves from day to day, but the bond markets are resolutely bearish.
So the next prime minister will find, as Papandreou did before him, that he will be ground down between the millstones of the EU’s demands on the one hand and the Greeks’ economic weaknesses on the other. He will have to decide whether to cooperate with the slow draining away of Greek national sovereignty in the name of debt restructuring or face up to a default that preserves his country’s independence.
The pressure from the EU will be unrelenting and unforgiving. In just one example, European Union Economic and Monetary Affairs Commissioner Olli Rehn accused Greece of breaching the confidence of its Eurozone partners last week, putting itself “on a path toward leaving the single currency,” but allowed that the now repentant unity government “appeared to be back on the brink from the brink.”
Matthew d’Ancona, writing in today’s Telegraph, puts his finger on the problem:
One of the many errors the Founding Fathers of the euro made was to underestimate the resilience of the nation state. Yes, we live in a world in which technology, money and people flow across borders with greater ease than ever before. Globalisation makes the planet dramatically interdependent: Philip Bobbitt, the constitutional historian, has written brilliantly of the emergence of what he calls the “market state.” Even so, the nation has retained much of its cohesion, its significance and its grip on popular loyalty. One of the reasons that international elites hate Israel so much is that it is the clearest and most passionate example of this durability.At its heart, the contradiction at the heart of the EU reflects the centuries-old division created by the Rhine and the Alps—Germanic and Anglo-Saxon v. Latin Europe. This split goes all the way back to the Roman Empire and its inability to subdue the Teutonic tribes. The medieval struggles between the popes and the Holy Roman emperors, the political strife caused by the Reformation, all the way to the alliances in the two world wars—all found their causes in the conflicts between these two camps.
In the case of the euro, nation states have, predictably, followed fiscal strategies that suit them, rather than the rules and pacts that support the currency. That’s what nations do – which is why the euro will need some kind of formal fiscal union if it is to survive, an even bigger pooling of sovereignty than the abolition of 17 national currencies (most recently, in January, the Estonian kroon).
The European Union was born out of an enlightened desire on the part of the postwar German and French leaderships to heal this division. The Germans especially, horrified by the genocide they had perpetrated upon the world, believed that bonding themselves to a “Europe” in which they played a supporting rather than domineering role would subdue their cultural and economic dynamism, and thus win back for them an honored role among the world’s nations.
But the Germans aren’t the only peoples wracked by remorse. As the French writer Paschal Bruckner points out in his heartbreaking indictment The Tyranny of Guilt, Europe’s role in the bloody history of the twentieth century was of such magnitude that too many of its denizens have come to believe that only a severe self-abnegation can atone.
The whole world hates us, and we deserve it: that is what most Europeans think, at least in Western Europe. Since 1945 our continent has been obsessed by torments of repentance. Ruminating on its past abominations—wars, religious persecutions, slavery, imperialism, fascism, communism—it views its history as nothing more than a long series of massacres and sackings that led to two world wars, that is, to an enthusiastic suicide. . . . Europe, like a groggy boxer stunned by the blows he as absorbed, feels overcome by crimes that are too heavy to bear.Alas, it is ironic that the collective European decision has been the attempt to create a transnational state without abolishing its nations. Europe, the birthplace of democracy, has become suspicious of its own people and the potential that they will not appreciate the enlightened path out of remorse and guilt. No wonder its leaders reacted with horror to Papandreou’s suggestion that the Greeks themselves should decide whether to accept the EU’s money and conditions!
But, Bruckner continues, this chosen path cannot lead to the success its founders dreamed of.
Timorous and all-devouring, the Old World is in danger of dying, like Rome, of obesity, an ectoplasm that grows larger as it loses its substance. It combines political resignation with the infantile hope of being able to include millions of additional people without difficulties. But the border is not an obstacle, it is the condition for the exercise of democracy, it establishes a durable link between those sheltered within it and gives them the feeling of belonging to a common world. . . . The true advance in thought as well as in politics is to move the barriers, not abolish them. One has to have a home in order to open oneself up to the outside, and it is good that nations be separate in order to exist.The enforcers of the European Union can browbeat the Greeks into accepting their money and the terms upon which it is lent—and the Greeks, having no one to blame but themselves for their immense deficits, bear the sole responsibility for finding themselves in this jam—but the price that all of Europe will pay will not be worth it.
The U. S. is no innocent bystander. We too have run up our national credit cards to unsustainable amounts, and we too have no easy choices as a result. Our task is to sober up and face the consequences of our actions, drawing upon our deep strengths for the courage and substance needed to turn things around. We must recognize our human weakness of wanting to keep in place things that once worked well but have since atrophied or become counterproductive, and apply the lessons of our history and success to building a new economy and the governance to encourage it.
The unwillingness to do this is the great folly of the American Occupiers, but like their European counterparts they are stuck in their utopian preoccupation. Not for them the excitement of building a new and better world, but rather the grim work of holding on to the world they prefer, even if such a thing has never existed.
And thus the opera buffa threatens to degenerate into a classical Greek tragedy, at whose heart always lies hubris.