Category Archives: International affairs

Out of the darkness

Illustration in linocut by Manos Symeonakis

There’s a short audio clip played almost on a daily basis on Skai radio’s political satire program, Ellinofrenia. It’s of Prime Minister George Papandreou saying: “Viva Chile, viva Grecia.” Presumably, it was recorded when Papandreou, then head of the opposition, visited Vina del Mar in Chile last March for a meeting of Socialist leaders. The clip is played randomly during the irreverent show. Its effect is to make Papandreou seem a dreamy globetrotter with an appetite to pursue international contacts rather than solve Greece’s problems. But since the rescue of the 33 miners from the San Jose gold and copper mine last week, those four words have taken on a new life and their abstractness has been replaced by an urgent relevance.

Watching Luis Urzua, the last miner to be winched to safety, sing the Chilean anthem as he stood next to President Sebastian Pinera and the team of rescuers in the early hours of Thursday morning, the parallels between Chile and Greece seemed as crisp and clear as the night air in the Atacama Desert. The Chilean anthem has a line, which seems prescient in the case of the miners who spent 70 days in an underground shelter fearing for their lives: “Either the tomb will be of the free / Or the refuge against oppression.” In this respect, it is very similar to Greece’s national anthem, Dionysios Solomos’s “Hymn to Liberty,” which is also dedicated to the ideal of freedom and contains the lines: “From the graves of our slain / Shall thy valor prevail.”

Freedom is such a highly valued concept in Greece and Chile because they wear the scars of oppression — from outside forces but also from within: Both countries have experienced damaging military dictatorships in their recent histories. But even in 2010, there are still struggles for freedom in Chile and Greece. In the Latin American country, despite the economic prosperity and political stability it has enjoyed over the past two decades, some of its people still feel the tug of history’s shackles. Despite the fact that Chile produces more than a quarter of the world’s copper and that prices for the metal are at a two-year high, bringing the country almost 4 billion euros a month in export revenues, some miners are still not truly free from the exploitation of firms taking deadly risks for profits.

In Greece, freedom has been compromised in different ways. As a result of its irresponsibility in the past, Greece’s economic sovereignty is largely in the hands of the European Union and the International Monetary Fund rather than the country’s elected government. While the foreign overseers plot a course for economic recovery, Greece is trying to free itself of the stale ideologies, practices and hangups of the past that held it captive.

It’s in this effort to save itself that the rescue of the Chilean miners provides Greece with food for thought. Speaking of the mesmerizing effort to pull the miners to safety, Chilean writer Isabel Allende said it had been an “odyssey of solidarity,” just as Prime Minister George Papandreou had said Greece was embarking on a “new odyssey” when he announced in April that Athens was turning to its eurozone partners and the IMF for financial assistance. Solidarity, however, has been in short supply in Greece, as opposition parties, unions and even aloof members of government continue to play the same tired roles to which the Greek people have become accustomed over the last three decade. Even at this most crucial hour, there is only the flimsiest of consensus on the gravity of the situation and what needs to be done. For instance, the country’s two main parties, New Democracy and PASOK, have been able to agree on few strands of economic policy, such as the opening of closed professions and the overhaul of the Hellenic Railways Organization (OSE), which is losing 1 billion euros a year. It is hardly as if they have become brothers in arms.

One of the greatest lessons of the San Jose rescue is that when suspicion and anger — as the miners were justified in feeling after being sent into a patently unsafe mine — and scepticism and doubt — as Chile’s government and the rescuers would have felt in launching a seemingly futile rescue mission — are set aside, wonderful things can happen. “It is proof that when men unite in favor of life, when they offer their knowledge and effort to the service of life, life responds with more life,” wrote Chilean novelist Hernan Rivera Letelier in Spanish daily El Pais. But for life, or at least a life worth living, to have a chance of existing, people have to put their faith in each other. “You just have to speak the truth and believe in democracy,” said shift foreman Urzua in his first post-rescue interview.

In Greece, the truth is a rare commodity at the moment. From deficit figures that keep changing to the cagey talk of ministers and the unfeasible promises of opposition politicians, nobody speaks honestly. The failure of our democracy was evident last week right in front of its greatest symbol, the Acropolis. Culture Ministry contract workers protested the non-renewal of their contracts in the hope that this government, like others before it, would cave in and ignore the law limiting such agreements to two years. The government, on the other hand, dodged a face-to-face meeting with the protesters because it had not paid some of them for 20 months.

The rescue is also evidence that for society to function, all its agents need to work together. State mining company, Codelco, led the effort to save the 33 miners, who had been working for a private firm, but it relied on help from other countries and private-sector funding. It was on the basis of this sound structure that the emotional support network for the miners, made up of families, friends, doctors and psychologists was built. “What we have recovered here… is our self-confidence as a nation, and sense of community, of Roman ‘communitas,’ of some well-being which depends on others: our neighbors, our friends, our most efficient [political] representatives,” explained Chilean writer Jaime Collyer. In Greece, the individualism that came with the economic prosperity of recent decades stands as one of the biggest obstacles to progress. Those who for so many years have evaded tax, landed themselves comfortable public sector jobs, enjoyed the privileges of closed professions, lived off state subsidies or simply disregarded the laws of their state are not going to trade this bliss of isolation for the give-and-take of a functioning community very easily. The decision this week of many bar and restaurant owners to flout the recent ban on smoking in enclosed public spaces because they feel it harms their business is evidence of how deeply mired Greece is in the “me first, me only” way of thinking.

The successful rescue of the miners, though, is a reminder of the reward of overcoming fear, selfishness and lack of vision. “We aren’t the same as we were before the collapse on August 5,” said Pinera. “Today, Chile is a country much more unified, stronger and much more respected and loved in the entire world.” Unlike the burst of media interest in the Chilean miners’ plight, Greece has been the subject of prolonged media exposure this year. There were roughly 60 journalists for each miner at the San Jose mine and at times Athens has felt a bit like that with the international media probing every aspect of Greece’s misfortune. It has been uncomfortable but, as Chile has shown, there is no bigger news in the world than a catastrophe being turned into a triumph. “For the moment, Chile has received a reputational windfall,” wrote Mary Dejevsky in UK newspaper The Independent. “It has a chance to join countries such as Canada and Finland that genuinely do punch above their weight internationally by virtue of the benevolent impression they create on visitors, their quiet diplomacy and the competence with which they seem to run themselves.” A trickle of positive comments about Greece’s economic reforms has already begun but it can’t compare to the cathartic effect that a deluge of praise would have if the country completes the metamorphosis from pariah to shining example.

Chile experienced a moment of salvation when the miners were lifted safely from the depths of the Atacama Desert. “It started as a tragedy but ended as a blessing,” said Pinera. As a result, the South American country can now look to the future with more hope and its spirits lifted: Viva Chile. For Greece, redemption still seems to be at the end of a long, dark tunnel. It’s now clear that grabbing a lifeline will not be enough — the country needs togetherness and belief to haul itself into the light. Only then will it be in a position to turn to the world and shout: “Viva Grecia.”

This commentary was written by Nick Malkoutzis and was published in Athens Plus on October 22, 2010.

Mission unaccomplished

Illustration by Manos Symeonakis

There have been many occasions during the Iraq War when the conflict has felt like a badly stage-managed show rather than a chaotic, bloody affair: from the sound and light display of the “shock and awe” bombing campaign of late March 2003, to the toppling of Saddam Hussein’s statue in Baghdad’s Firdos Square the following month and George W. Bush landing on the USS Abraham Lincoln in May 2003 to declare “mission accomplished.”

There was another moment like this on August 19, when the 4th Stryker Brigade, Second Infantry Division, rolled over Iraq’s border with Kuwait to signal the end of US combat troops’ involvement in the war. Almost two weeks ahead of the deadline that President Barack Obama had set, American soldiers left the country they had invaded on March 20, 2003. In another piece of slick presentation work, Obama is due to deliver an address on August 31 from the White House, in which he will officially declare the USA’s participation in fighting in Iraq over.

Like the media-set pieces that went before it, though, Obama’s speech will ring hollow. At the same time that the President will be addressing the nation, there will still be about 50,000 US troops active in Iraq. Technically, they’re not “combat teams” but “advisory and assistance brigades.” But these soldiers will be accompanying Iraq troops on missions and if they come under fire from insurgents, I imagine the Americans will not hesitate to turn their “advice” on the enemy combatants and “assist” them to death.

Perhaps it’s fitting that a war born out of mendacity, falsehoods and exaggerations should be ushered into its closing stages – although clearly not its end – by half-truths and manipulation. Like his predecessor and former British Prime Minister Tony Blair, Obama, who is desperate for a public relations windfall, appears to be relegating the Iraq War to nothing more than a media spectacle. It also devalues his stance on ending US involvement in Iraq, making it seem a policy of convenience rather than an attempt to provide answers to the very profound and troubling questions posed by the conflict.

More than seven years after the first coalition troops moved in to find weapons of mass destruction and overthrow Hussein, the West – the countries that backed the war and those that opposed it – still desperately lacks self-knowledge. For all the flag waving on one side and the banner unfurling on the other, we are in a state of ambivalence about if or when it is right to use force. Apart from the deaths (between 97,000 and 106,000 civilians according to the Iraq Body Count website), the destruction and the geopolitical ramifications which have seen Iran and Turkey drawn into events, the Iraq War has had another devastating impact – it proved to be the moment when democratic politics broke down.

It failed on two accounts: firstly because Bush, Blair and several other leaders chose not to be straight with their electorates about an issue as important as going to war. This breakdown in the democratic process was compounded by the fact that, despite the attempts of their leaders to obfuscate, voters who knew they were being hustled still remained powerless to prevent the relentless march to war. Secondly, the right and the left both produced very shallow responses in the face of a complex situation. The neoconservative-led right claimed the moral high ground because it was supporting the ousting of a dictator and moves to bring democracy to not just a country but a whole region. The left felt it was superior because it was rejecting armed conflict as an option and drawing attention to possible ulterior motives for the conflict. To a small extent, both sides could claim to be right but in actual fact they were mostly wrong.

The moral bankruptcy of the neocons has long been proven. For all the bluster of bringing freedom to Iraq, it soon became obvious that there was no reconstruction plan to ensure its people were free to lead normal lives. For all the talk of wiping out “evil” with democracy, there was clearly never any intention of tackling dictators in other countries, such as Zimbabwe, or intervening to stop innocent people being slaughtered in places like Darfur.

The weakness of the left’s position took a bit more time to become evident but it’s clear now that it too has been guilty of treating the Iraq War as a zero-sum issue, when it’s actually a much more complex equation. Although the left clearly had plenty of fodder to support its argument against the war, it has not come up with a convincing alternative. As British journalist Nick Cohen wrote in “What’s Left?”, his 2007 critique of the antiwar movement: “They didn’t support fascism but they didn’t oppose it either. Their silence did not bode well for the future.”

Well, the future has arrived and the silence is still ringing in our ears. We have a Democratic president in the White House who appears to have no moral blueprint to guide him on US intervention around the world. We have European leaders who have plenty to say about fiscal deficits but nothing to say about democratic deficits. We have a feeble United Nations that seems unable to have an impact even in places where it has mustered up a presence – an investigation has been launched this week into how its troops missed the rape of 150 women and boys in the Democratic Republic of Congo when they were patrolling the area. In Greece, we have a prime minister who is a democratic idealist that wants to contribute to the Middle East peace process but is not willing to commit more than a few dozen troops to Afghanistan, where the specter of another brutal Taliban regime hangs over the country.

Iraq, many thought, was going to be the watershed moment for this generation, when beliefs would be honed and theories sharpened — but now that the dust is subsiding, it’s clear we’ve been left with only an ideological bomb crater. When lines were drawn over the invasion, it gave decision makers a chance to turn their backs on vital moral and political questions. More than seven years later, we have made no apparent progress in being clearer about when there is legitimate cause for intervention. In that sense, as well as others, Iraq has been a failure.

This commentary was written by Nick Malkoutzis and was published in Athens Plus on August 27, 2010.

Opportunity or opportunism?

It’s never really been determined where the proverb “The enemy of my enemy is my friend” originated. In a way, it’s fitting we don’t know because it’s a philosophy that has been applied throughout time and across the world. Many people feel that Greece’s rapprochement with Israel over the past few weeks, culminating in Israeli Prime Minister Benjamin Netanyahu’s visit to Athens this week, shows that this age-old proverb still has relevance today.

There is no doubt that relations between the two countries have come a long way in a very short period of time. It was only in the 1980s that Israel viewed Andreas Papandreou’s Greece as a rogue state that gave succor to Palestinian terrorism and Arab radicalism. Papandreou had aligned himself with the Arab world when many in his PASOK party felt that Greece should play a leading role in the Third World, creating a new force that could spring up between the communist East and capitalist West. He also believed that by currying favor with the Arabs, he could ensure their support in his dealings with Turkey and perhaps convince them to invest in Greece.

It is ironic that Papandreou’s son, George, should now attempt to follow a dramatically different course, one that runs between the Arabs and Israelis rather than veering to one side. Of course, he does so in an environment that is nothing like the one experienced by his father. There are no eastern and western blocs now: The pieces on the geopolitical chessboard are in constant movement. Also, Turkey is now the region’s big player – when it talks, the Arabs listen, not the other way round. And, as far as foreign investments go, the weak presence of Arab capital in Greece never seemed to merit sacrificing the country’s foreign policy. Attempting to lure the Chinese yuan rather than Arab petrodollars appears to offer far greater rewards.

So, in brutal, realpolitik terms, it seems to make perfect sense for Greece to upgrade its relations with Israel and continue a process of reconciliation that began tentatively in the 1990s. But, by reaching across to Israel, Papandreou runs counter to a strong anti-Israeli, and in some cases anti-Semitic, current in Greek society. Israel is still regarded with suspicion and anger by many Greeks who view the Palestinians as their spiritual kin. Israel’s decision at the end of May to board six ships, two of which were Greek, carrying humanitarian aid to Gaza – leading to nine activists being killed and 35 Greeks arrested and deported amid claims of abuse – fed rage among many Greeks about Israel’s role in the Middle East and rocked relations between Athens and Jerusalem.

So, many find Papandreou’s decision to warm to Israel rather shallow. They are convinced that Greece is only interested in playing its newfound friendship with Netanyahu’s government against Turkey, at a time when Ankara and Jerusalem, who for so long had a flourishing relationship, are failing to see eye-to-eye. There is little doubt that the breakdown in relations between Greece and Turkey has acted as a catalyst for Netanyahu and Papandreou, and that the dividing line between opportunity and opportunism is very thin indeed. However, anyone believing that Turkey would be overly concerned by Greeks and Israelis conducting joint air force exercises or working together to manage their water resources is fooling themselves. Turkey, which is seeking an ever more active role in Iraq and closer ties with Iran, is jostling for position at the bargaining table with the USA and the world’s other major powers, where Greece is far from the biggest chip in the pile.

Rather than a brave piece of triangular diplomacy, Greece’s approach to Israel should be seen as a common-sense move. At a time when so many aspects of international relations are in flux, especially in the broader region around Greece, and when the local economy is being tested like never before, it seems only logical that Athens should aim to have as many friends and as few enemies as possible.

This commentary was written by Nick Malkoutzis and was published in Athens Plus on August 20, 2010.

Win or lose?

Illustration by Manos Symeonakis

When Greece lines up against Argentina at the World Cup in South Africa on Tuesday, the two sides will not appear to have much in common. Argentina, a squad packed with some of the planet’s best soccer talents, will be wondering whether it can make it to the final. Greece, a squad of ageing tryers running short of ideas, will probably be wondering what time their flight home is.

But beneath the surface, there is plenty that links these two teams. They both represent countries that have experienced economic meltdowns. Both have suffered the ignominy of being ridiculed for their handling of public finances. Both have had trouble convincing financial markets of their credibility. Both peoples have had to endure the consequences of these failures.

The similarities do not end there. Before defaulting on almost $100 billion of debt in 2001, Argentina had tied its currency to the dollar for 10 years – almost as long as Greece has been a member of the eurozone. Buenos Aires also relied on loans from the International Monetary Fund, paying a rate of 6 percent – almost as high as the one Greece is paying for its bailout package. And, despite Buenos Aires adopting austerity measures in 2001, the IMF pulled out of the South American country, triggering a default and devaluation of the peso.

“The circumstances leading to the Greek and Argentinean crises were similar – two countries with a great reputation that did not see the consequences of their excessive expansion and who counted on continued external support,” Claudio Loser, a Senior Fellow at the Inter-American Dialogue, a Washington-based forum for opinion leaders, told Athens Plus

Argentina once had an economy that was as dynamic and successful as Diego Maradona, the country’s former star midfielder who now coaches the national side. But like Maradona, who suffered from drug abuse, health issues, money problems and general erratic behaviour, the Argentinean economy hit a brick wall in 2001. Greece always craved a Maradona-like economy. The good news is that it finally got it. The bad news is that it’s the fat, wheezy and unruly Maradona, not the nimble world-beater.

So, with talk of default and exit from the single currency rife in the Athens air. Is there anything that Greece can learn from Argentina? Fernando Navajas, the chief economist and director of the Buenos Aires-based FIEL think-tank believes the best advice for Greece is to be more cohesive and organized than Argentina. “I am not saying that devaluation and default could have easily been avoided but one could have minimized the costs by some collective action on the political side coupled with a professional approach to crisis management,” he told Athens Plus. “Argentina did just the opposite on both fronts. Instead of minimizing, it maximized the cost of the crisis.”

Argentina’s disorderly retreat meant that millions of people lost their savings overnight and the value of property crashed, bringing people out onto the streets in daily protests. More than 20 people lost their lives in riots. It’s no wonder that Argentineans are cautious when they hear economists recommending that Greece leave the euro and devalue the drachma.

“Do not be fooled by a sorcerer’s apprentice that tells you the Argentinean case is a good recipe for Greece,” says Navajas. “This is particularly true in the case of magic formulas that involve asymmetric conversion from euros to drachmas in the financial sector.

“If confronted with the hard choice to abandon the euro, Greece should combine collective action and high technical capabilities to think not of an unconditional exit but rather an exit-plus-reentry program,” adds the FIEL director. “Argentina never thought about reentry and has been drifting ever since.”

Argentina used the depreciation of the peso to offset declining domestic demand by making its exports cheaper in foreign markets. It sounds like a good example to follow but Greece exports hardly anything. Also, unlike Argentina, Greece is one of 12 members of a single currency and any decision to abandon the euro would have far-reaching consequences for its eurozone partners and the European Union as a whole. Even if exit and devaluation were a viable economic option, it is almost inconceivable in political terms. This leaves debt restructuring as the only realistic option on the table.

“A process of adjustment without devaluation is possible although it may require in practice a reduction in nominal salaries and declining prices for goods and services, such as tourism,” says Loser. “A situation of adjustment without a serious look at the debt is much more difficult.”

However, even restructuring carries a very heavy economic and political cost. Argentina’s decision to default may have seemed like a simple way to get rid of an onerous load but it only helped the country switch one burden for another. Since 2001, the South American country has not been able to borrow on international markets and has been involved in a protracted process to convince its creditors to accept a loss on their investment. In 2005, three-quarters accepted a bond exchange worth a third of what they had invested. Buenos Aires is currently in negotiations with the remaining creditors and has given them until June 22 – the day Greece will play Argentina – to accept a debt securities swap.

Since its default, a number of factors have helped Argentina turn its fortunes around. Chief among which was the upturn in the world economy during the last decade. Greece, on the other hand, has to clamber out of its deep hole in the middle of a global recession. Also, Argentina’s success has come at a price – increased government spending that has been funded in part by central bank reserves and nationalized pension funds. Many economists have been scathing about this tactic, accusing the government of President Cristina Fernandez, who dismissed the rescue plan for Greece as being “condemned to fail”, of having no economic plan and burning its way through the country’s savings

“Argentina’s default and devaluation was a one-way journey without any careful planning that damaged the reputation of the country and affected its long-term growth prospects,” says Navajas. “This has been hidden by the extraordinary external conditions after the crisis, which will not be available for Greece, and which have led to confusion about the causes of recovery.”

It’s evident from Argentina’s experience that despite what some may say, default and exit from the euro are options that Greece should avoid considering. Or, at least if it does, then it should think its strategy through properly, something Greek governments do not have a very good track record of doing. Of course, there is always the possibility that, as with Argentina, its financial backers will just lose confidence in Greece and default/devaluation will not be a matter of opinion but a matter of course.

“The big message is that even with significant resources, there is a point when the rest of the world – or Europe and the IMF in Greece’s case – will not be willing to continue the support, even if they support others, such as Portugal, Spain and Ireland, because they are seen as more virtuous,” says Loser. “This is exactly what happened with Brazil and Uruguay at the time of the Argentinean crisis.”

There are clearly many things that Greece can learn from Argentina but perhaps the most useful one is that, as the national soccer team is likely to find out on Tuesday, when your back is up against the wall, there is no easy way to end up on the winning side.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on June 18, 2010.

Germany, a cold case

Dortmund – It used to be said that if the United States sneezed then Mexico caught a cold but in the German heartland of North Rhine-Westphalia, you get the impression that as far as the European family is concerned there has been a reversal in the relationship between the economic superpower and the lesser associate and that Greece’s sniffles are causing the Germans a big headache.

There was a state election here on May 9 that Chancellor Angela Merkel’s party lost. Her reluctance earlier this year to commit quickly to a rescue package for Greece was partly down to the fact that she didn’t want the coalition government – made up of her center-right Christian Democrats (CDU), its Bavarian sister party the Christian Social Union (CSU) and the pro-business Free Democrats (FDP) – to suffer a defeat in North Rhine-Westphalia and lose its majority in the Bundesrat, German Parliament’s second legislative chamber. But this is not turning out to be Merkel’s year and that’s exactly what happened.

Although there is no conclusive evidence to prove that the Greek crisis was the decisive factor in her party’s defeat, it did appear to have some impact. Pollsters Infratest dimap found that the Greek crisis was “important” or “very important” to 52 percent of voters. On the other hand, 47 percent said it wasn’t important. The actual election result was equally ambiguous as it didn’t leave the opposition Social Democrats in a position to form a center-left coalition to govern the state and negotiations about who will do so are still continuing. But maybe it’s in this absence of a clear cut message that one can find the true effect of the Greek crisis. Above all, it seems to have disorientated the Germans –  Merkel and her citizens appear to be confused about what kind of Europe they want and what role Germany should play within it.

Merkel had wanted to bring a “culture of stability” to the European Union but her actions have been more schizophrenic than stable over the past few months. First she procrastinated over whether to come to Greece’s aid then she allowed French President Nicolas Sarkozy to play the lead role in constructing an unprecedented 750-billion-euro EU support framework for debt-ridden countries. Now, Merkel has sprung into action and over the last few days has called for a global levy on banks and the creation of a new European credit rating agency, as Germany unilaterally banned naked short selling of eurozone government bonds and other securities.

This has all played out against the backdrop of a divided domestic opinion – 52 percent of Germans support the Greek aid package and 43 percent are against it according to a poll by Forsa for Stern magazine on May 5 and 6. In North Rhine-Westphalia, Germany’s richest and most populous state, it’s easy to see why Greece’s debt and borrowing problems seem like a world removed. Whereas Athens has been faced with interest rates of more than 7 percent above the German bund rate, North Rhine Westphalia is paying just 0.35 percent more than Berlin to borrow money. Equally, committing funds to bail out Greece galls some Germans when their government has agonized over whether to prop up Opel, the local subsidiary of General Motors, and the Karstadt department store group. Maybe it’s no surprise that Germans are split over the way forward.

There is a feeling, however, that this indecision starts with Merkel. “Her whole governing style in domestic politics since she became chancellor has been one of hesitation, cowardice, not taking a stand, not doing what a leader should do,” Florian Hassel, a business reporter for Die Welt daily told Athens Plus.

“Her lack of solidarity with Europe this year has made many Germans feel extremely uncomfortable,” Daryl Lindsey, the editor of the online version of German weekly magazine Der Spiegel told Athens Plus. “The idea of Germany being isolated in Europe is horrifying to most Germans because the country’s strong role in fostering European integration is a large part of what has created the modern Germany which has been able to move forward from its difficult history.”

Having a flummoxed Germany as the EU is facing a cascade of new challenges could be a disaster for the Union, especially when the problems the euro has run into mean that more, not less, cooperation is needed. “It has become apparent that the euro was a fair-weather construction from the beginning and that you cannot have an economic union in the long run without a political one,” says Hassel. “But as few Europeans are willing to move forward with a political union, we have a crisis on our hands which will last a long time.”

However there is some hope that Germany will snap out of its stupor. The swift agreement between EU leaders earlier this month to put together the 750-billion-euro guarantee was “close to a miracle,” according to Lyndsey who thinks it’s a sign that Germany could yet be a champion of European solidarity. “It actually shows the extent to which European unity already exists,” he says. “If Merkel is ready to state that the threat to the euro represents an existential threat to the European Union, then I think she and the Germans are ready to fight to save it.”

Germany’s participation in the so-called “shock and awe” package, which may reach some 150 billion euros, was approved by the country’s Parliament last week. It could prove a pivotal moment for Germany, which has profited so much from membership of the EU and eurozone, which are captive markets for its exports, just at his from its business, banking and defense dealings with Greece. “We’re doing this in our best national interests… the common European currency has been a huge benefit to Germany,” said Finance Minister Wolfgang Schaeuble before last week’s aid vote. “Without the euro, we would have a much weaker economy, a much weaker Germany.”

It’s clear, though, that much more than the future of the euro and the continent’s economic stability is at stake. The crisis is not just an economic one, at its root it is political. The real question being asked of EU countries is not what fiscal policies they should follow but how closely coordinated and managed they should be. In other words, how much solidarity is enough and how much integration is too much? “It isn’t just about a currency but about the European project per se,” Germany’s former Foreign Minister Joschka Fischer told Der Spiegel in an interview this week. “It’s about the issue of whether Europe is strong enough and has the common desire to defend its project against external attacks, in this case, by speculators.”

With the stakes so high, we may see a much more decisive Angela Merkel from now on, suggests Lindsey. “There has always been a feeling in Germany that Merkel’s background as a scientist is too often reflected in her political decision-making. Logic and reason are comforting in situations that permit slowly calculated decisions, but that scientific thinking appears to be incompatible with fast moving markets.” He believes the criticism she has received for dithering over key European issues “is likely to be highly motivating for the German chancellor.” He also thinks public opinion will gradually swing behind efforts to bolster the union. “The money required to save the euro will directly affect German quality of life, but people are slowly coming to terms with this now and they know that the alternative would be far worse.”

In the meantime, we wait to see if Germany has contracted a common cold that it will soon recover from or whether it has a case of pneumonia that could prove deadly, not just for the patient but for the rest of the family as well.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on May 28.