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Greek NO should be the beginning of the end for Eurozone

One can support the European Union and the Common Currency but on Greece’s example, the EU repeatedly proven in the last 5 years that it has little to do with “common ideals” and the much praised “European solidarity.” the Greek example and the way EU politically dealt with it increased the number of EU-sceptics across the continent. Quite some Greeks voted NO on grounds of principles.

Before Sunday’s Referendum, Bruno Waterfield from UK’s The Times wrote:

“I’m a “no” on grounds of general principles that are as much universally European as they are British.

The arguments for and against European Union are fundamentally about the constitution of politics. Constitutional in the true sense of the word: about the nature of politics, who participates in politics, and for whom political structures are organised.

In that sense, the EU is constitutional in a highly negative way and builds new barriers to democracy and citizenship.”

Sunday’s NO – ΟΧΙ –  of 61.3% not only changed the political map of Greece. It may change also the Eurozone in short term and the European Union in long term. For whatever the reasons and motives of the European people.

The article below has been published on The Times and is written by Bruno Waterfield.

Greek vote should be beginning of the end for eurozoneby Bruno Waterfield

One thing is clear: the 61 per cent of Greeks who voted Οχι are unhappy at five years of austerity diktats from the bossy European officials who cruise Athens in air-conditioned SUVs.

Europe’s great and good lined up to warn them that voting No would be a vote for leaving the euro, abandoned to a fate something like Germany’s in the 1930s.

They voted No or Οχι anyway.

Just a week ago, Sigmar Gabriel, the German vice-chancellor, who was once a dove, said that the Greek referendum was “yes or no to the eurozone”.

He went further, to argue that if Greece was to “blackmail” the eurozone with a popular vote “to put forward national interests above the will of all others – the likes of Le Pen and Wilders win”.

So there you have it, the Greeks must be ignored or the far right have won. It is that sort of debate.

Greeks are desperate and brave enough to take the gamble of refusing to carry on the same way, with cuts to living standards in return for a bigger debt mountain dragging down their economy.

The voters knew all too well that Greek banks are quite literally about to run out of cash or collapse if the European Central Bank pulls the plug. They voted No anyway.

The country is paying back billions every month this summer to the IMF and the European Central Bank at a time when it is struggling to meet its obligations to the Greek people.

The austerity – the much vaunted “primary budget surpluses” – is so that Greece can pay back loans, 90 per cent of which were used to replace private banking risk with public debt. It will be paying back money until 2057.

One issue stands out, the eurozone’s refusal to write off debt. A grainy black-and-white picture became an internet hit during the referendum. It showed Konstantinos Karamanlis, Greek finance minister at the time, alongside Konrad Adenauer, the German chancellor, in London in 1953. He is signing a document to write off 50 per cent of German debt.

No such such offer is on the table from the eurozone, especially from Germany.

Even the International Monetary Fund, who are no bunch of bleeding hearts, support a debt write-off for Greece, of the order of 30 per cent. The eurozone has made it a point of principle that it will not happen until Greece implements intolerable austerity measures that the country’s parliament has not been able to pass since 2012, well before Syriza.

There’s a problem. Letting the Greeks off their debts has become as politically toxic in the creditor countries – Germany, Austria, Finland and the Netherlands – as austerity is in Greece. Governments in Ireland, Portugal and Spain are hardline too: they implemented eurozone austerity at a high political price, requests for debt relief were brutally rebuffed.

Before talks can begin with Greece, the German parliament must vote to give its approval. Many have made clear that Germany should not do business with Alexis Tsipras, the Greek prime minister. Debt writedowns are a taboo. Angela Merkel has vowed (again, again and again) that all Greek debts will paid back to Germany’s taxpayers – a pledge given the lie by economic reality.

Hard-working Germans don’t want to share their wealth by letting others off debts incurred on their public purse – especially when the money goes to Greeks, who are regularly and offensively pilloried by right-wing politicians and the press.

Last Friday, Germany’s Bild newspaper had a good idea, calling its own “referendum” by asking readers to fill out a poll on whether Germany should keep paying loans to Greece. “Should we support Greece with further taxpayers’ billions?” was the question. It was a joke. But why not?

Germany should have a referendum. A nein would effectively be an in or out vote on euro membership (of course), if Germany voted that it did not want to pay tens of billions to Greece.

In Austria, 261,159 people have signed a petition demanding a referendum on whether Austria should leave the EU because of the loans to Greece. The petition must now be debated in parliament.

France too is restless. Even the pro-EU ruling socialists are profoundly nervous over the discipline that Germany now wants, with powers for the eurozone to impose austerity and economic structural reforms. The largest opposition party, Marine Le Pen’s Front National, wants a referendum on the euro. And why not?

Underneath the EU’s platitudes about peace projects there lies an unpalatable, indigestible truth: Europe’s peoples do not accept that they should take on the debts of other countries or surrender to diktats cutting their living standards from external, foreign bodies such as the European Commission, ECB or IMF.

Not one European nation (that I can think of) enthusiastically embraces the idea that the EU, in Brussels or Frankfurt, should be able to dictate to them how they spend the national wealth that they earned, or instruct them to share it with Greeks or others.

The eurozone, always a dubious political construct (motivated by panicky measures to shackle a reunified Germany) is now in the position of uniting all Europeans, in different ways, in a European Union of resentment and recrimination.

Let all the eurozone’s countries vote. Just as empires once stood in the way of a democratic Europe, so does the EU’s single currency today. It needs to go, before resentment and recrimination become something uglier. The Greek vote should be the beginning of the end.

The European Union has to reform itself ASAP.
NO poster seen last week on the island of PATMOS
Referendum Patmos1

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6 comments

  1. costa sakellariou

    nice article!

    unfortunately, the politics of SYRIZA are a bit confused…or they truly have a master plan which is unfolding in stages (which i have trouble believing).

    dialoguing with the banks for a ‘human’ solution is a waste of breath – and i would have thought that people with a background in the CP would be acutely sensitve to that dialectic!

    i hope the dialogue in greece turns to the colonial nature of the relationship of the southern countries to the northern. the destruction of traditional greek agriculture and all the light industry the country once had (pitsos, izola, peiraiki-patraiki) and its replacement with ‘foreign’ imports has left the country today with limited options.

    it is serious talk – but there really is no alternative at this point. more ‘deals’ with european ‘partners’ will just be more of the same…

    and i think that varoufakis falling on his sword is a bad sign…

    • I agree the Southern EU countries have their traditional industries hurting. However, it is more a function of modern world globalization than “colonial policies” of the North.

      The strength of the Greek light industry, for example, was based to a significant extent on having one of the lowest labor cost within the EU. The modern footwear and apparel industry, however, is based on global supply chain that spans the world. Even China is getting too expensive. The most work gets done in even lower-cost countries like Bangladesh, Sri Lanka and Vietnam. The multi-national companies also learned how to ensure the quality can be consistent regardless of where the work gets done. The successful EU companies (whether they are from the North or from Southern states like Italy) are not competing on costs, but on having a brand and quality that the world demands.

      I agree it is a structural problem that EU has to deal with somehow. Having the most successful industries in the countries that were richer to begin with will continue to attract the best and the brightest among the young from the poorer EU nations. That keeps reducing the retirement and welfare contributions in the poorer states even further. Maybe, a solution would require to create more EU-level welfare and pension redistribution schemes?

  2. “The European Union has to reform itself ASAP” Not gonna happen, either Tsipras does a monumental U turn going against the referendum results, or it unleashes “the beginning of the end for Eurozone”.
    Frankly I am less stressed now, after the NO vote the Rubicon was passed, most of the fight is still to come, but now I am sure that there will be no “agreement. Break and a new start is the only possible way.

  3. You can try to make this problem bigger, but the problem is first of all a problem of the Greek people and how they want to manage their country, with or without the euro.

  4. Seriously? Greece was about 1.7% of the Eurozone before this crisis. Now I can only guess its overall capital is about 1% of the Eurozone. How is that an existential threat?

    • Greece was 3% of eurozone GDP in 2OO8 before the crisis.
      The 1.3% drop is due to the stupidity of the EU austerity.