The bitter brinkmanship between Greece and its creditors has reached new heights this week. Though the debate is mostly consumed in exchange of economic arguments, it is not so much a disagreement over economic policy that deepens the divide now. The reason is mostly different interpretations of why austerity has failed so desperately in Greece and who is responsible for this failure.
It is not sure that the blame game will settle down in favor of a compromise in the following days. Many of the demands made by creditors appear to come out of a historical vacuum. The standoff on pension payments is a good example. Creditors are asking for a reduction of pensions, given they eat up Europe-beating 16% of Greek GDP. But this is only so because Greece’s economy is now 25% smaller than it was when austerity started being implemented in 2009.
And yet, despite the IMF and European leaders having accepted the failure of such austerity measures, they expect that more of the same will somehow finance unsustainable Greek debt. For five years Europe’s leaders let debt bondage destroy a country for no good reason. Greece, a 2% of EU total GDP, was in need of deep socio-political reforms – instead, the Troika insisted on unproductive fiscal consolidation based on ideological constraints.
Lets accept there may be occasions where politicians have to circumvent evidence and use legitimate coercion to achieve strategic political objectives. But it becomes very dangerous when leadership risks complete fallout with reality. Greece’s insolvency is worse than when the crisis started and Europe’s leaders will push a solution to the issue as far into the future as possible. The problem is that this is not a first.
Delaying inevitable consequences, thus accumulating tremendous political and social risk, is not just a feature of the ongoing eurozone crisis. It is, in fact a systemic flaw in the set-up of the European Union, recurring in every crisis Europe has faced since the beginning of the 90s. The dissolution of Yugoslavia and its specific historical characteristics were significantly affected by the engagement of EU member states during the wars and beyond. Afterwards the EU envisaged a stabilisation strategy based on a long-term integration process of the Western Balkans, supported by financing tools. But 25 years years after the Yugoslavian dissolution the region hangs in limbo: integration is moving slowly if at all, and a social and political stalemate threatens to reanimate the ghosts of the past. Clashes between police forces and separatists in Kumanovo last month is proof of how explosive the region remains.
For years the EU has addressed the immigration and refugee crisis unfolding at its external borders as a security issue. It has enabled security oriented research and through its funds syphons billions of euros into a survailance architecture that serves the interest of the emerging European security-industrial complex while it ignores basic facts. There are no walls, virtual or not that can keep people out, they can only increase the cost of smuggling and the loss of life. Europe is surrounding itself in this high tech fortress (EUROSUR, EURODAC, VIS, PNR, SMART PROJECT PACKAGE) despite every demographic projection suggest it should accept and integrate about 25 million people by 2050.
Whether its Greek insolvency and the eurozone stability, the Western Balkans stabilization, the immigration and refugee crisis, EU leaders have chosen to satisfy national audiences and minimize political costs instead of looking for real solutions. They have kept up like this so insistently while problems have surrounded the EU project, now they again are choosing to ignore the dire reality surrounding them.
But Europe’s raw material has been reality. When in 1951 France, West Germany, Italy and the Benelux countries signed the Treaty of Paris and established the Coal and Steel Community they did so by accepting that ideological and moral constraints could not be the key element in forming policy objectives. Current EU leaders have parted with this kind of realism long ago, they let ideology determine policy more than it should. EU citizens observe apathetic while this flaw is becoming a terminal threat for Europe. The EU is in need of a historical reality shock before it’s too late. Hopefully it won’t be called Grexit.