19 November
2012

The Euro-Crisis Becomes Existential as Greece Passes Austerity-Budget for 2013

Posted in Europe, World Affairs

Leaving aside the definite articles and one might, according to taste one’s economic and political points of view,place inverted commas over almost all the termsin this blog’s title. Letus perform the exercise.

‘Euro-Crisis’

This is not, in fact, the crisis of a currency, but rather that of a wholeculture, one spanning the EU as well as many non-Euro countries. Since the EU is the largest trading bloc in the world we have on our hands what amounts to a ‘World Crisis’. We have been too long borrowing from the future and have failed to recognise that the present must one day become the past when the money was borrowed and which is not going to pay us back. The crisis is as much moral as fiscal. We must return to a more sober and smaller kind of government in order to put our finances on a sustainable financial footing.

‘Becomes’

This is a favourite of mine. Some would argue that the present turmoil in Greece, Spain, Cyprus and Italy is just the logical outworking of the Maastricht treaty. Currency union without a political union was a naïve dream. In fact, however, the crisis is becoming a means of bringing about deeper political union and is seen by some as simply an uncomfortable episode on the journey towards a Federal Europe.

‘Existential’

As long as the European Commission and the ECB are willing to indulge Greece the Euro will be in crisis. The right medicine is not more loans but rather a hard default on Greek debt.As long as Greece remains in the Eurozone (and by implication in the EU) it is doomed. The ECB loans are part and parcel of Greece’s problems. Let Greece default and start printing Drachmas. That will be painful in the short-run but will avert more serious austerity later on.

‘Greece’

After having ceded so much sovereignty to the EU Commission, and now to the ECB Greece is no longer a sovereign country. Democracy has no say in the country’s affairs as the Greek Parliament becomes simply an elected puppet to serve the interests of the wider EU.

‘Passes’

The government has not passed any measures at all. It is simply cooking the books as before. The budget voted on bears little resemblance to the  fiscal measures that will be implemented or  expected by the Commission, and anyway, it was not the will of the Greek people that gave the politicians their mandate, but rather a dictat from Brussels.

‘Austerity-Budget’

This can be read in twoways. Either it is not simply a requirement for belt-tightening measures but will in fact ruin the Greek economy and its people, or it is too little too late. The money the country owes has been spent and cannot be recovered.

Most worrying of all is the fact that Greece, often viewed as the epicentre of the Euro-Crisis, should be officially complying with measures designed to shoreup market confidence in its government, while at the same time the crisis shows no signs whatsoever of abating.

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