European leaders are preparing yet another “definitive” response to the euro crisis, at a time when even Chinese and American bankers have begun to plead for a reinforcement of the European Financial Stability Facility (EFSF).
Of course, everyone is worried by the risk of Greek default, but the question is: should we be even more concerned about the path that European leaders are now taking? And this question is all the more pertinent because Greece’s real problem is in fact never mentioned, nor is anything ever done about it.
The problem is that the place you occupy in Greek society is not determined by your talents and level of dynamism, but by your background and your relations. Of course, societies are never really fully meritocratic or nepotistic. However, the Netherlands for example is mainly meritocratic, while nepotism is the rule rather than the exception in Greece, where the concentration of power and property in the hands of the elites is such that they continually succeed in reinforcing their position.
If nothing is done to combat the problem of nepotism, the Greek economy will never be able to settle its debts, regardless of their scale. Even if we came together to write off the current Greek debt, the country will only take on more loans once the slate has been wiped clean.
Politicians turn a blind eye to structural problems
And guess who will be asked to foot the bill for the next bank or Greek state bailout? Acting as the guarantor of structurally weak economies by augmenting the capacity of the EFSF will not minimise future problems, but only aggravate them further. As it stands, our political leaders are letting themselves be guided by the same sentiments that led them to authorise Greece’s adoption of the euro, even though it did not respect the criteria for the single currency.
“Allowing” Greece to leave the Eurozone in exchange for the writing off of its debts would enable us to avoid a future financial burden. But at the same time, it would mean leaving the Greek middle class on its own to confront its country’s problems: and we should be concerned about the well-being of Greece’s citizens, who are the main victims of the administrative chaos that reigns in their country.
More euros will only serve to postpone the social struggle
The members of the Greek middle class are ready to pay income taxes like any other Europeans. But typically, they do not want to hand over money to their state, because they know it will only serve to fill the pockets of the families and friends of the regime in power. The euros that poured into the country in recent years have tranquilised the Greek population: everyone benefited to a small extent while the truly ambitious members of the young generation discreetly opted to leave. But now at a time when tensions are rising, a fresh influx of euros will only serve to postpone the social struggle that this country really needs to happen.
A better strategy would be to fully embrace the cause of the Greek people, which is something that we have not done up till now. The country’s elites have been sparing themselves, and imposing all of the burden on their well-intentioned compatriots. And they have been able to do this because the troika composed of the EU, the ECB and the IMF does not want to interfere too much in decisions made by the Greek government. The commitment to share the burden equally has remained a dead letter.
The troika must overcome its reluctance and act to restore democracy in the country that was its cradle. Is that not a wonderful European idea? It would require a transfer of Greek sovereignty even more radical than the one now under discussion. Otherwise, those cuts will never strike at their intended targets: the jobs and privileges of elites who now decide where savings should be made. If we do not break the power of the Greek elites, there is no possible solution. Unfortunately, this consideration is systematically overlooked by the European proposals which have been wheeled out at a frantic pace.
Athens is not Baghdad, but let’s not underestimate the difficulty of establishing a properly functioning democracy. However, this is the task we will have to undertake if we are to find a solution to Greek tragedy, which may still have a happy ending, unlike traditional theatrical tragedies. In its bid to overcome this situation, Europe will have to show much greater determination, but also a much greater sense of reality.
Is Papandreou on the verge of signing off?
The Financial Times Deutschland believes it has a scoop: “George Papandreou is considering resigning.” According to sources of the business daily, the Greek prime minister, caught between the street protests in Athens and the demands of international donors, has spoken to his inner circle twice about resigning over the past three weeks. His departure would surely provoke early elections, which “have been demanded by the opposition for months.” Overnight, a spokesperson for Papandreou denied the story. An FTD editorial, meanwhile, urges Papandreou to stay at his desk. “His is a mammoth task: to drag his country out of recession against the resistance of the population. As the most important guarantor of reforms, he must not resign.”