Financial Times: If Europe does cannot bend it will break

Financial Times: If Europe does cannot bend it will break

Athens, June 10, 2015/ Independent Balkan News Agency

Review Hari Stefanatos

“If Europe cannot bend it will break”, is the title of the article of Gideon Rachman in the newspaper Financial Times, which refers to the rigidity shown by the EU against the requests of Greece and Britain. “The Greek and British Prime Minister say that they have a democratic mandate from their homeland to seek changes in the relationship of their country with the EU. Both leaders have estimated that the other Europeans would prefer to satisfy their demands rather than risk seeing Greece leave the euro or Britain to leave the EU. But Mr. Tsipras and Mr. Cameron fall on a contrast wall in Europe that could lead them to destinations they want to avoid – the Grexit and Brexit”, Rahman says.

The author explains the causes of this contradiction, noting: “It is important to realize that this aversion to change is largely divorced from the merits of the reforms that are being required. Different EU governments have different views on whether the Greek or British demands are reasonable. There is some sympathy in France and Italy for Greek arguments that the country’s debts are unpayable and that further deep austerity would be counterproductive. There is some sympathy in Northern Europe for British arguments about social welfare and strengthening the role of national parliaments. But, regardless of the merits of Greek and British arguments, there is a deep reluctance to open the Pandora’s box of profound reform”.

Furthermore, says Rahmon, there are political reasons: “The problems involved are not simply legal, it is also politically. The worry is that the concessions will be made to the Greeks or British would generate a backlash, with the Germans or Dutch voters resenting a write-off of the Greek debt, or Polish voters outraged by restrictions on the rights of migrants from countries EU. Elsewhere, the sight of a radical left party, such as SYRIZA or eurosceptic conservatives, such as Britain’s Tories, extracting concessions from the rest of Europe could strengthen similar parties across the continent, making the EU even harder to manage”.

“The German government has been saying for some time that the Eurozone can withstand an exit of Greece from the euro. While Angela Merkel, the German Chancellor, still seems keen to keep Greece inside for geopolitical reasons, the German Ministry of Finance, under Wolfgang Schaeuble, now seems inclined to lean in to let Greece go, believing that this could have a positive effect on other countries – members of the eurozone. Whether or not Grexit happens, the German consensus is that the lesson from all the Greek crisis is that Europe must be even less flexible, the Eurozone needs tighter rules and stronger enforcement, including tougher supervision of national budgets by Brussels”.

And Rachman concludes: “Germany’s tough approach is based on a realistic assessment of how difficult it is to pass reforms through a 2-member EU – as well as profound aversion to rolling back the process of European integration. But it is also an alarming commentary on Europe’s inability to respond to changed circumstances, whether it is a 25 per cent shrinkage of the Greek economy, or the unexpected migration of millions of people across the EU. That failure to be flexible is dangerous. A Europe that cannot bend is much more likely to break.

Source: Financial Times