A Grexit would strike at the heart of public perceptions about Europe’s most inspiring project to finally end wars and build peace through voluntary cooperation among peoples long divided by blood-soaked mistrust.
That project was the 28-nation European Union bolstered later by a 19-member Euro currency zone. It is a monument to the political will of peoples to erase enmities that caused the death of at least 70 million in Europe’s 20th century wars.
Whichever way the Greek financial crisis is finally resolved, the project has already suffered a loss of trust in the perceptions of many Europeans, especially in the weaker countries.
Recovering the trust will require visionary leadership at a time when geopolitical trends are putting sharp divisive pressures on European unity, including the US pivot to Asia, Russia’s military and political challenges to the EU and China’s overwhelming economic rise.
After more than 70 years, the European project for “ever greater union” is still a work in progress. It trundles very laboriously because democratically-elected governments and sovereign parliaments must subordinate significant national power to EU and Eurozone treaties and rules. It demands vigilant nurturing each day.
EU and Eurozone legal frameworks are run by a mostly opaque and unelected bureaucracy ensconced in the byzantine European Commission. Trust in it has long dwindled among citizens in key member countries, including founders like France, Holland, Belgium, Germany, and Italy, and others like Britain and Spain.
Anti-EU parties are winning prominence because many voters think the Commission is unaccountable to citizens and the EU does too little for weaker sections of society.
The powerful Commission has preponderant influence in the Greek creditor’s troika because it does the technical work for political decisions and implements EU rules.
It is increasingly perceived as a quagmire of bureaucrats renowned for being sticklers for each comma of arcane Eurozone procedures. Thinking out of the box to help ordinary people is rarely the habit of any bureaucracy.
Britain (not a Eurozone member) is a prime example of the outsize power of anti-EU politicians. Their pressure has forced the conservative government to pledge a referendum in 2017 on remaining within the EU. British exit could cause upheaval for the entire European project.
France also has a strong anti-EU minority party, the National Front, whose leader is a credible contender for the 2017 Presidential elections.
Europeans put great trust in the civic concept of “solidarity”, which encourages the rich to share with the less fortunate through government-financed benefits. A Greek exit would be the first major breakdown of that foundational solidarity.
It could send a chill through the poor and middle classes in every European country except Germany, perhaps, because it is by far the richest and strongest export-led economy.
In Britain and France, anti-EU leaders argue that the EU does too little for the poor and unemployed and is too subservient to big money to deserve their continued allegiance.
Because of the solidarity principle, all EU citizens have decent pensions, minimum wages, and reasonable health care and social welfare nets. Now Greece’s creditors, with backing from Germany’s powerful Angela Merkel, are insisting on further crippling austerity without a firm promise of debt forgiveness or alternative debt restructuring.
Many in German administration and parliament feel aggrieved because their country has made many very expensive sacrifices for Eurozone stability during Merkel’s 12-year reign. However, the politics of modern economic governance in a union of sovereign nations depends heavily on public perceptions going beyond hard facts.
Greek voters favored the coalition leader, Syriza, because they were fed up with years of austerity imposed by the German-led Eurozone partners. In their perception, their lives worsened during the past five years and austerity without a path to economic growth was the wrong formula. Now, many suspect that Greece’s creditors are trying to overthrow the Syriza-led regime for a more pliant one.
Almost half of Europe’s people are left leaning and sympathize deeply with ordinary Greeks whose plight they see during travel and on TV every day. Some polls suggest that over 60% of Europeans of all political hues oppose severe austerity because it stifles growth.
Their governments may not agree with such emotional reactions but the damage will come from reinforced public perceptions that Eurozone policies favor financial institutions and government treasuries at the cost of ordinary people.
They are not entirely unfounded. For instance, most of the bailout money given to Greece so far has reimbursed European governments and banks with almost nothing trickling into the stricken domestic economy.
Merkel, the undisputed political queen of Europe, may bridle at allegations that her reign has worked to the benefit of financiers while neglecting the economic suffering of ordinary people, particularly in a weak EU country.
But there is much evidence showing that Germany and France, its preferred European partner, were allowed to run large government deficits after 2008 in violation of EU rules while Greeks are being asked to suffer still more.