Montreal Gazette

Financial clout trumps consensus in EU talks

EU, Greece talks show financial clout trumps quaint idea of consensus

- MATTHEW FISHER

What the negotiatio­ns between Greece and the European Union over the country’s future in the eurozone have revealed is that the current Greek government — and the ones that preceded it — are not to be trusted, even to run a lemonade stand, a fellow Canadian noted over the weekend. But the fault is not entirely Greece’s.

The country’s exit from the eurozone and its adoption of a new, devalued currency was the solution the EU should have pursued five years ago when it became known Athens had badly cooked its books. But the notion no one in the eurozone could ever leave trapped everyone. It also led the Greeks wrongly to believe the obsession of countries such as Germany and France with what they called the European project — which was to end the nationalis­m that twice led to such deep trouble in the 20th century — gave them the power to write their own ticket.

Greek Prime Minister Alexis Tsipras and his motley collection of left-wing and right-wing populists, communists and euro-skeptics, trumpeted this theme to win the election six months ago, then repeated it to win a “referendum” on July 5. That ballot soundly rejected the terms of what was unquestion­ably a sweeter deal for Greece than the one Tsipras had to swallow Monday.

There are broader issues and themes in this debacle that have not received much scrutiny. One of them has been Germany’s reluctance, even when seriously tested, to act on its obvious feelings. It has generally been portrayed as the “heavy” in this tangled saga and has always favoured following rules, yet it also sought a negotiated solution with Greece because it highly values the European project.

So much of the EU’s mythology has now been shot to pieces. Rather than the quaint idea Europe must decide everything by consensus, power truly lies in the hands of those with the most money. This explains the impotence of France.

A question nobody wants to answer is whether the EU is essentiall­y a political project that simply uses economic agreements and mechanisms, which can be fudged whenever necessary, or truly an economic associatio­n, with binding rules and a focus on maximizing the wealth and com- petitivene­ss of its members.

For many of the EU countries, it is the former. That is the reason the problems countries in the Mediterran­ean basin have had with the euro were allowed to fester for so long. It is also how Greece, a nation of only 11 million people, got in hock for 323 billion euros ($452.9 billion) and now needs another 86 billion euros ($120.6 billion) to get through the next three years.

Another hope has been that the benefits of economic union — particular­ly the “share the wealth” aspects — would inevitably lead to the demise of nationalis­m and the developmen­t of a European identity. How is that particular part of the project going right now?

As for Tsipras, the jig may be up. If he is to push the deal with the EU through the Greek parliament — and it remains only an “if” at this point — he will have to disown some of his closest friends and allies in the radical Syriza party. He has double-crossed his comrades in the party and the public so many times, it is hard to keep track of all his zigs and zags. However, a good starting point is the mandate voters gave him to deliver on his anti-austerity platform. That has been totally contradict­ed by the deal he signed on to Monday in Brussels.

Tsipras had also insisted Greece must run its own affairs (with others’ money). But he failed in that, too. Eurocrats and Internatio­nal Monetary Fund officials are being sent to keep a close watch on all the money Greece receives and spends.

No matter what happens next, Tsipras’s failure is nearly complete. Most Greeks do not believe his wobbly coalition government will see out the year.

The scale of the financial challenges now facing the continent will likely cause further distress. The Germans, in particular, are terrified by the idea of Podemos, Syriza’s left-wing Spanish twin, taking power in Madrid. Their nightmare scenario is a chain reaction of victories for radical left parties in the debtor nations, who could simply refuse to pay their debts with a view to triggering a “new order” in Europe.

One of the most interestin­g developmen­ts in the past few months has been the hardening of attitudes among Germany’s socialists. They do not dismiss the benefits of capitalism like many of their brethren elsewhere in Europe, and have increasing­ly come to see fiscal irresponsi­bility of others as a threat to their own country and its welfare state.

After months spinning on this carousel, most Greeks expressed no joy but some grim satisfacti­on Monday that a deal — any deal — had finally been struck in Brussels that will get their ATMs dischargin­g thick wads of euros again. Whatever their attachment to the European project, the Germans, who will foot a large chunk of the bill, are unlikely to be so sanguine about the hum of those Greek cash machines.

The scale of the financial challenges now facing the continent will likely cause further distress. The Germans, in particular, are terrified by the idea of Podemos, Syriza’s left-wing Spanish twin, taking power in Madrid. Matthew Fisher

 ?? LOUISA GOULIAMAKI/AFP/GETTY IMAGES ?? Greek Prime Minister Alexis Tsipras arrives at his Athens office, Monday. If he is to push the EU deal through the Greek parliament, Tsipras will have to disown some of his closest friends and allies in the radical Syriza party, writes Matthew Fisher.
LOUISA GOULIAMAKI/AFP/GETTY IMAGES Greek Prime Minister Alexis Tsipras arrives at his Athens office, Monday. If he is to push the EU deal through the Greek parliament, Tsipras will have to disown some of his closest friends and allies in the radical Syriza party, writes Matthew Fisher.
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