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No coup to be found here.

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July 15, 2015 by Fiachra

parthenon

Writing in the Telegraph this week, James Kirkup makes a persuasive argument that the twtterati are wrong to classify the agreement between Eurozone governments and Greece as an anti-democratic coup. The gist of his argument is as follows:

  1. The majority of money earmarked for the Greek bailout will come from the treasuries of Eurozone states.
  2. Eurozone governments are democratically elected, and are as such answerable to their citizens.
  3. The majority of these citizens are taxpayers, in some form or another, and as such would be understandably concerned at their being lent to an insolvent country, which has recently defaulted on its IMF payments.
  4. It is perfectly rational and democratic that Eurozone member states would impose harsh terms on Greece, in order to demonstrate to their citizens that their money was safe.
  5. Greece is free to accept or reject any agreement, and deal with the consequences thereof. If Greeks disagree with their government’s decision, they are free to vote them out at the next election.

Therefore it is not surprising that the terms imposed on Greece are so harsh. While commentators, especially economic commentators, are probably right in arguing that this will be counter-productive in the short, medium and possibly even long term, the fault of this lies not with the German government – not even with Dr. Wolfgang Schäuble, who has been singled out for particularly rough treatment by the twitterati. No, the fault lies with the confusing and decentralised political structure of the Eurozone itself. Partisan attacks against the German government in recent weeks are a symptom rather than a solution to the problem, which is nationalism. Arguments to the effect that the German people suffer from an unusual lack of empathy are also unhelpful. While recent opinion polls show a stubbornly high percentage of the German population support a Grexit, it is the German taxpayer that will be footing most of the bill for keeping Greece financially afloat and within the Eurozone. Whereas British public opinion is generally more supportive of Greece, this did not factor much in the mind of British Chancellor George Osborne, as he vetoed the idea of British taxpayers’ money being include in the Greek bailout.

The governments of nation-states have a strong interest in protecting their taxpayer’s money, and this is the route of the problem. So long as Europe is constructed along nation-state lines, the national interest of the strongest member state – in this case Germany – will inevitably prevail. Were the European Union – or at the very least, the Eurozone – to be reconstituted as a truly federal state, with full fiscal authority, then things would look very different. Here we would see Europeans looking out for each other, rather than Germany (grudgingly) looking out for Greece, and vice versa. There would be no chaotic negotiation process, meaning that economic rationality would triumph over national interests, and decisions would be made in a timely manner. The focus would thus be on getting Greece back on its feet, rather than making sure that it is capable of paying its short term debts.

One thing is perfectly clear: German-bashing commentators who liken Dr. Schäuble to Adolf Hitler have no interest in bringing Europeans together to find a sustainable solution to this political crisis. Sowing further seeds of discord between Germany and Greece will do nothing to convince them to support the radical integration measures needed to end the Euro-crisis once and for all.


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