The answer to the Greek crisis is in the Treaty

Olivier Colin, Voltaire promotion, 3 July 2015

The European Union has been founded on a set of values: “respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities”. Those values are not only common to the Member States but are also considered to be “universal”, meaning that they should be applied to all human beings. As Europeans, we would interpret that as the willingness to promote and apply those values to all human societies in the world. Unfortunately, when it comes to money and power, European decision makers are not even able to apply such values at the European level. In that context, how can they pretend that our model of society is universal if we are not even able to apply it within our own borders?

Let’s start with the concept of solidarity, which is one of the core values of the European Union. The concept is quoted 28 times in the Consolidated Treaties.  The preamble of the Treaty on the European Union insists on the desire to “deepen the solidarity between their people while respecting their history, culture and traditions”. Article 2 specifies that “solidarity prevails” in the European society. Articles 3 ensures that the Union “shall promote economic, social and territorial cohesion and solidarity among Member States”. What can we learn from this in the context of the Greece crisis? Instead of solidarity, all the crisis management has been based on individualism and protection of national interests. As a matter of fact, this has been proved to lead to an even worse situation with a 25% decrease of the country’s GDP in five years. European leaders should have thought about restructuring Greek debt since the beginning. Instead, they have based their strategy on selfishness and hypocrisy by lending continuously money to a country with the only purpose to try to save their own package, i.e make sure that Greece will reimburse its debt. Nevertheless we can always argue about the moral hazard issues associated with debt restructuring. And we must recognize the initial responsibilities of the previous Greek governments for disastrous management of public money, and internal problems of corruption. That is why European leaders should of course keep a strong position on their requirements. However, at no point during the 7 past years of crisis, European decision makers have thought about helping Greece to recover a safe environment to be able to reconstruct and solve the failures within the society. On the 226.7 billion euros lent to Greece since the beginning of the crisis, almost two third has been used for debt servicing[1] while debt restructuring would have been the optimal solution to give the country a chance to recover. This does not seem to be a good model of solidarity. Should we remind us that in 1953, at the very beginning of Europe, 21 countries – including Greece – decided to cancel 60% of the German debt, helping the country to recover and allowing the reconstruction of Europe?

Source: greece.greekreporter.com

Source: greece.greekreporter.com

What should we think then about the concept of the respect for human dignity? We all have in mind the scenes of those retired people, waiting in front of the bank to be able to withdraw 120 euros for the whole week because of the government’s decision to close banks and impose capital controls and withdrawal limits. Is that really the model of Europe we have been building for more than 60 years?

The violation of democracy has been pointed out by many people during this crisis. We find the origin of the concept back to the 6th century b.c.e. in Greece precisely. Is there really a lack of democracy in today’s negotiation on Greek debt? One might think that democracy is not applied because Europe is forcing Greece to keep going with austerity even if the Prime Minister Alexis Tsipras has been elected to provide change and evolve to a new paradigm. In that context, Europe is not listening to the Greek people and their choice. However, this statement is not correct[2]. The conflict of perception here comes from the decision making process and the lack of political union at the European level. Syriza has been elected by the Greek people on the basis of a political program and only the Greek government is expected to apply this program. No other people in Europe has voted for Syriza’s program and it would be against democracy to impose the Greek solution to all Europe. When negotiating a two-sided contract, one should take into account the requirements of both parties before signing a new convention. It would be a lack of democracy if all the Greek requirements were fulfilled as only 11 million electors had the right to vote for this program. Greek current crisis is not about a lack of democracy. However, it has pointed out the lack of a strong political union within the EU.

This being said, on a purely economic point of view, the Eurozone should easily absorb the possibility of a Grexit. Greece accounts only for roughly more than 2% of the Eurozone GDP and Greek exports accounts for only 0.3% of those of the Eurozone. It would not be easy, but the Eurozone should survive. However, beside this, there would be a human disaster in Greece and it would confirm the current failure of the European model.

This article does not aim to point out responsibilities. However, it is more than ever the right time to think about what Europe should be. With no fiscal or political union and national governments consistently protecting their own interests, the European Model is far from the idealist view written in the Treaty. The question is to know if the model of democracy and political decision making as it is designed at the European level can be associated with a model of solidarity at the same level. What do we mean exactly and how far do we want to go with solidarity? Maybe the crisis helped us to point out that those two values included in the Treaty are mutually exclusive in today’s model of Europe.

[1] Source: MacroPolis.gr

[2] As pointed out by Corentin de Salle, scientific director of the Centre Jean Gol

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