Just over a year ago I commented on the unwillingness of President Hollande in France to comply with rules imposed by the European Union. Today the big news story is the outcome of the general election in Greece. The winning party, Syriza, has made clear their intention to increase the minimum wage and provide large numbers of people with free electricity (not really free, but paid for by someone else).
What makes this election result momentous is that Greece is an economic disaster, with unemployment running at around twenty-five percent. The Greek people have been enduring this misery for many years now, and its membership of the Eurozone is largely to blame.
Syriza is not opposed to membership of the Euro, or at least not at the moment, but it is opposed to the austerity measures that membership has inflicted on the Greek people.
Back in the late 1990s, Denis Healey warned that the European single currency would work only if there was a perpetual flow of money from the north of Europe to the south. Now the Greeks have elected a government which wants Greece to stay in the Euro, but without the Greek people paying the price. More money must come from elsewhere in Europe, and Germany is the country which immediately comes to mind.
Germany can refuse, of course, but to refuse might prompt the Greeks to quit the Eurozone. If Greece were to prosper outside the Eurozone - and European countries not currently in the Eurozone are faring much better than those within it - then it might prompt other countries to leave as well.
The eventual outcome could be either the demise of the Eurozone or else a much smaller Eurozone with only Germany, Holland, Belgium, France, and maybe Austria retaining the single currency.
Either way, the original dream of a gigantic pan-European single currency is dead in the water. Austerity was supposed to keep it alive, but democracy has killed it.
Related previous posts include:
Cameron versus the EU
Austerity versus democracy
No comments:
Post a Comment