The Eurozone leaders saved Greece from an unwanted exit from the single currency, but the British Europhobes at the Telegraph cannot resist painting the success all in black. Frankly, I don’t think there’s anything Europe can do right in the eyes of these hostile pessimists.
What is fascinating, though, is that the political extremes are now openly befriending each other; nationalistic conservatives with a longing for a twentieth-century-divided Europe and anti-austerity Marxists are now the best of friend, joint together by the resentment of pan-European politics. But it’s a shallow friendship.
What Europe needs, as many in Greece realise, is proper federalism. Greece’s now former finance minister, Yanis Varoufakis, hit a point in a recent article:
The euro is a hybrid of a fixed exchange-rate regime, like the 1980s ERM, or the 1930s gold standard, and a state currency. The former relies on the fear of expulsion to hold together, while state money involves mechanisms for recycling surpluses between member states (for instance, a federal budget, common bonds). The eurozone falls between these stools—it is more than an exchange-rate regime and less than a state.
And there’s the rub. After the crisis of 2008/9, Europe didn’t know how to respond. Should it prepare the ground for at least one expulsion (that is, Grexit) to strengthen discipline? Or move to a federation? So far it has done neither, its existentialist angst forever rising. Schäuble is convinced that as things stand, he needs a Grexit to clear the air, one way or another. Suddenly, a permanently unsustainable Greek public debt, without which the risk of Grexit would fade, has acquired a new usefulness for Schauble.
What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.
He is probably wrong about the malicious Germans—a popular but xenophobic stereotype—but he is right about the decision the EU, and especially the Eurozone, must now make between federalism and the current, unsustainable system.
Big decisions, like the ones made over the past weekend, that have a deep impact on European taxpayers, ought to be debated in public and not behind closed doors. The Council of the European Union, where ministers from member states gather and make decisions, should become a proper senate and its ministers held accountable by their national parliaments and their electorate. The secretive culture and the Kremlinology that surrounds today’s summits must stop, and the people of Europe must be able to listen to all arguments raised. The EU needs more democracy, and it requires federalism.