Greece, Euro Stagger toward the Brink: How Will It all End?

It appears that many Europeans have had just about as much Europe as they can stand.
June 29, 2015 • Commentary
This article appeared on Investor’s Business Daily on June 30, 2015.

Negotiations to resolve the Greek fiscal crisis collapsed Friday, with Greece heading toward a referendum on the issue in the midst of an economic crisis. The European creditors say that they are still open to negotiations, but it is not clear what negotiations would entail.

The European Union was supposed to create a de facto United States of Europe. Although Dutch and French voters rejected the original constitution, the Eurocratic elite forged ahead with a treaty, which did not require popular ratification other than in Ireland.

But after last January’s Greek election, it was obvious that the EU does not speak for Greece or perhaps anyone else other than the Eurocrats, an amalgam of bureaucrats, academics, journalists, businessmen, politicians and lobbyists who dominate the EU’s capital, Brussels.

To most EU leaders, common people are an impediment. The Eurocrats reflexively intone “more Europe” in answer to every question, but voters increasingly are supporting protest parties, some populist, some worse.

Advocates weren’t shy about their ambitions. In 1992, German Chancellor Helmut Kohl predicted “creation of what the founding fathers of modern Europe dreamed of after the war, the United States of Europe.”

The euro was one step in the unification process. The commercial union added a monetary union, currently joining 19 nations. A more powerful EU was expected.

Alas, the organization has three presidents, who compete for attention and authority. The parliament has only a passing connection to the people of Europe. No European would die for Brussels, not even the Belgians, who barely averted the breakup of their badly divided nation.

But the EU carries on, secure in the support of the vast majority of the continent’s elite, including national governments.

The Euro crisis has shaken this political foundation, however.

Until January, the popular revolt was contained. But then radical left‐​wing Syriza, many leaders just a step or two away from communism, won a near majority. The new government rejected the Brussels consensus. Default threatens, and it most likely would mean a Greek exit (“Grexit”) from the Eurozone and possibly even from the EU.

However the crisis is resolved, the march toward ever greater power in Brussels appears over. Euroskeptic and radical parties are on the rise.

Who are the dozen most spectacular Euro villains?

  1. Helmut Kohl. The first chancellor of a united Germany, Kohl agreed to sacrifice the legendary German mark for the euro.
  2. The Greek political establishment. Both of the dominant parties, Pasok and New Democracy, profited from the sclerotic and venal state that they created.
  3. Greece’s creditors. They lent money at near‐​German interest rates to a nation unlike Germany.
  4. The International Monetary Fund. Originally created to support a system of fixed exchange rates, it has become one of the primary financiers of Greece.
  5. Valery Giscard d ‘Estaing. One of the principal architects of the EU constitution, he pushed forward with the Lisbon Treaty, constructed to leapfrog the European people.
  6. Alexis Tsipras and Syriza. This disparate movement of the left believed in fiscal alchemy — more government spending, taxing and regulating would turn into a roaring economy.
  7. The European Central Bank. The ECB shifted from economics to politics when it began buying the bonds of deeply indebted European states, most notably Greece, to subsidize the improvident.
  8. The Greek people. Euro‐​subsidized borrowing allowed them to prosper despite their economy being littered with bloated bureaucracies and privileged cartels, and hamstrung with debilitating regulations and profiteering politics.
  9. British Prime Minister Tony Blair. The heir to the world’s longest and most influential parliamentary democracy, this exemplar of “New Labor” sacrificed national sovereignty in ratifying the Lisbon Treaty.
  10. The French political elite. France’s people suffer from stultifying state controls and high taxes. The right is as statist as the left.
  11. The European Parliament. More often than not, voters use EP contests as an opportunity to protest unpopular rulers at home.
  12. Angela Merkel. She has spent her years in office doing as little consequential as possible. A Eurocrat to the core, she opined: “We have a common currency but no common political and economic union. And this is exactly what we must change.”

The European story is reaching its climax, and no one knows how it is going to end. Greece and the European establishment might yet come to terms, and the Euro might stagger along. But this almost certainly is not the Eurozone’s last crisis.

It appears that many Europeans have had just about as much Europe as they can stand. In coming months and years, the debate is likely to be over how much and how fast they can roll back “Europe.”

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