Tag Archives: Maastricht

A sum of parts

Ilustration by Manos Symeonakis

“The antidote for 50 enemies is one friend,” Aristotle said and goodness knows how Greece could use that friend right now, as it stares at those disgruntled European faces across the table.

The closest it has come to finding a friend among them is French President Nicolas Sarkozy. The warm embrace he offered Prime Minister George Papandreou in front of the cameras in the Paris drizzle last week was symbolic. He was telling the other Europeans it was time to close ranks around Greece and protect it from itself and, more pressingly, from the destructive nature of international speculators. Sarkozy also reportedly contacted German Chancellor Angela Merkel before the Brussels summit to discuss the possibility of offering Greece concrete assistance.

It’s not the first time that Sarkozy has come through for Greece. At the NATO summit in Bucharest in 2008, he rallied the other major powers to prevent the Former Yugoslavia Republic of Macedonia (FYROM) joining the alliance due to its failure to resolve its name dispute with Greece. The same year, Sarkozy visited Greece, the country from which his maternal grandfather – a Jew from Thessaloniki – emigrated. He became one of only a handful of foreigners to address the Greek Parliament, giving a speech that drew its inspiration from the decades-old slogan of “Greece-France-alliance” but which also contained moving references to his grandfather.

Many Greeks believe their country is worthy of this form of personal relationship with other EU countries. They pine for a union in which their northern neighbors are not obsessed with numbers but show understanding for their often erratic behavior. Greeks would like their European partners to display respect for the country’s history and traditions – we may be crafty devils now but we were once philosophers and poets and our continental cousins should not forget that.

What the last couple of weeks have shown, though, is that in times of crisis, there is little room for personal sentiment. Greece has broken the rules and for all its insignificance on Europe’s economic map, its irresponsibility is threatening to blow the whole show sky high. Ancient gods will not save Greece and the EU now, only some very contemporary fiscal belt-tightening and possibly even financial aid can rescue the situation.

Yet, for all the numbers, indices and percentages that govern Greece’s current relationship with the EU and the European Commission, the country’s headlong plunge into fiscal crisis also poses some profound questions about the Union’s future. While Greeks may deserve to be castigated for their mendacity and incompetence, there is a point at which the EU must decide how to support Greece, unless the very unity and stability of the bloc is not to be put at risk. An unprecedented set of events have brought the EU face-to-face with a dilemma that will define the nature of the Union itself. France’s former Culture Minister and another long-time friend of Greece, Jack Lang, suggested as much last week: “Europeans have a unique opportunity to prove the deeper meaning behind the European Union,” he said. “For our love of Greece, out of our respect for Greek civilization but for Europe itself, we have to act.”

The immediate question for the EU is what form this action should take. For the time being, the eurozone countries have settled for declaring political support for Greece while asking the PASOK government to adopt austerity measures. Both are designed to deter hedge funds and other speculators while bringing the Greek economy within the euro’s deficit and debt boundaries. “This is the worst imaginable punishment for a nation but it is also a consequence of being a member of the European community,” wrote the Suddeutsche Zeitung daily in Germany. “It is only in times of crisis that you see what a system is capable of.”

Also in times of crisis, those who support bold action are usually in a minority: an Emnid poll indicated that 71 percent of Germans oppose giving financial aid to Greece. As the conservative Frankfurter Allgemeine Zeitung put it: “The Greeks are taking to the streets to protest against increasing the retirement age from 61 to 63. Are the Germans now supposed to work until 69 and not 67 so the Greeks can enjoy early retirement?”

Merkel, backed by the Frankfurt-based European Central Bank (ECB) and its president Jean-Claude Trichet has so far rejected a solution that would involve lending money to Greece, arguing that this might stop the government from taking tough measures. The German chancellor instead points to Ireland, which restored market confidence through a program of drastic spending cuts and reductions in public sector wages and pensions. Berlin also argues that a German constitutional court would block any attempt to bail out Greece as this is not permitted under the terms of the Maastricht Treaty that set up the single currency.

They would be valid arguments under normal circumstances but we live in extraordinary times – times in which the dithering of governments, the like of which allowed Bear Stearns and Lehman Brothers to collapse in the fall of 2008, comes at a heavy price. The failure of Washington to act then proved disastrous and very costly. Other governments, including many in the EU, learned from this mistake and pumped billions of euros into the financial system to prevent its collapse.

They now face a similar situation but this time it’s a country, not a financial institution, in danger of going under and pulling others with it. As Jean-Claude Juncker, the Luxembourg Prime Minister who heads the eurogroup said this week, if Greece were forced out of the euro, “the effects would be like an earthquake, uncontrollable.” With the other so-called PIGS (Portugal, Ireland, Greece and Spain) economies suffering problems, Juncker, Merkel and the other EU leaders would do well to absorb the implication of a Greek default, rather than just keeping their fingers crossed it won’t happen.

The threat of contagion means it’s impossible to support the argument that taxpayers in one EU country should not be footing the bill for the economic failure of another. Taxpayers in Britain and Germany had no choice about whether their money was used to keep banks afloat last year – they simply had to accept this was the wisest long-term option.

If the Maastricht Treaty, signed in 1992, does not allow for a bailout then it should be altered. The financial landscape has been reshaped beyond recognition over the last two decades and the EU’s institutions and mechanisms need to catch up.

Also, Greece is not Ireland and cannot be expected to adopt the same measures when there are clear, chronic structural problems that need to be addressed first. Masking this with tax hikes and public sector salary cuts will fool no speculator worth his fat-cat bonus.

The EU has given Greece a month to prove that it can get its economy back on track but the Union has to use this time to consider its own role as well. The Greek crisis is questioning the very purpose of the EU, whose strength has always been, as Aristotle also said, that “The whole is more than the sum of its parts.” But what Europe must now consider is that when one of those parts collapses, the whole is not worth very much at all.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on February 19, 2010.

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The ditch Blair project

Tony_blair_witch Project_a.jpg

Illustration by Manos Symeonakis

Tony Blair must be getting used to rejection by now. He left office in 2007 unloved and unwanted after 10 years as British prime minister. His attempt to win back some respectability as an international statesman by becoming a Middle East envoy has been a damp squib. And now his voyage to become the Europe’s first president appears to have foundered on the EU’s perennial rock of uncertainty.

In hushed tones and behind closed doors, European leaders last week seemed to reject the idea of Blair being appointed president of the European Council, a position created by the ratification of the Lisbon Treaty by all 27 EU member states.

Blair has some characteristics that would make him a suitable candidate for the role (charisma, valuable political experience, good communication skills, the ability to lead and diplomatic presence) but for many these are outweighed by the baggage he would bring with him (the Iraq War, his close ties to George W. Bush, his unpopularity in his own country, a pending investigation into whether he lied to his people and parliament and a fraught relationship with the EU in the past).

The fallout from the Iraq War is the biggest elephant in the room blocking Blair’s path to the presidency. The decision to hitch his wagon to George W. Bush’s lone star is something Europeans cannot overlook easily. But given the chance, Blair would probably explain that as the British prime minister, he had to make a decision – a very wrong one as it turned out – about whether to take part in a war. Had he been the prime minister of Belgium or Luxembourg, for example, perhaps his toughest foreign policy choice would have been what color bunting to get out when dignitaries visit from abroad.

Blair might even argue that having been through such a maelstrom and suffered the political consequences of his choices, he has the ideal experience to now be a unifying rather than a divisive figure. But even this does not dispel the dark cloud of mendacity that hangs over him. The Chilcot inquiry into Britain’s participation in the Iraq War will hopefully establish beyond doubt what Blair knew and what he told MPs and the public before committing troops to that conflict. The fact he’s due to face such an investigation appears to undermine his bid to become EU president. To risk having the first person in such a high-profile role publicly exposed as a liar would damage the Union. Of course, there would be more than a hint of hypocrisy in the air if he is rejected on this basis alone: Few of the 27 leaders who decide who fills the role are paragons of virtue themselves – any group that has Silvio Berlusconi as one of its most prominent decision-makers can hardly claim the moral high ground.

Perhaps that’s why some of them decided to suddenly create new criteria for any presidential candidate: his country would have to be a member of the eurozone and part of the Schengen Agreement – Britain is neither. If the EU’s aim is to appoint the best person for the job, then this shifting of the goalposts is preposterous. Theoretically, the EU president should be someone that’s transnational, not national, federal, not feudal. If he or she subscribes to the European project, then their homeland’s policy should be irrelevant.

10_okOf course, Blair’s critics would argue that he’s always been at loggerheads with the Union, typified by his stance in 2003 in the buildup to the Iraq War, which was widely interpreted as an effort to split the bloc. However, Blair has engaged with the EU in more constructive ways as well. One of his first acts after being voted into power in 1997 was to abolish Britain’s opt-out of the Maastricht Treaty’s Social Protocol. He was also one of the proponents in 1998 of giving the EU a role in defense policy and was a champion of the bloc’s enlargement. He was the first British prime minister to put the UK’s budget rebate up for discussion in 2005, when he urged member states to reform the Common Agricultural Policy and cut the extensive waste and laziness that it leads to, as we are well aware of in Greece.

In June of that year, Blair stood before the members of the European Parliament and set out a vision for a less bureaucratic, more liberal and modern Europe. “The people of Europe are speaking to us,” he said of citizens’ waning interest in the EU. “They are posing the questions. They want our leadership. It is time we gave it to them.” More than four years on, that leadership is still absent and, as the turnout in June’s European Parliament elections indicated, interest in the EU is flimsy. These are issues that, theoretically, a European president could address.

The role has been created so that someone can preside over the European Council – the regular summits between the 27 heads of government – and coordinate its work. According to the Lisbon Treaty, the president should also “ensure the external representation of the Union on issues concerning its common foreign and security policy.”

Yet, what we have seen over the last couple of weeks is a climb down from this position. The message from Brussels last week was that it would be preferable for the president to come from one of the smaller member states, that he or she should be able to strengthen Europe from within, not necessarily give it a presence on the world stage, and be willing to play second fiddle to European Commission President Jose Manuel Barroso and the 27 leaders.

“There is an argument that a political star as a president of the EU would lead to trouble with the president of the Commission and other leaders,” Robert Goebbels, the Luxembourg MEP who has launched a petition to stop Blair from being considered for the job, told Athens Plus.

It would be one of the EU’s more quixotic moments should it create an opening for a figurehead who could use diplomatic and communication skills to promote the Union to an increasingly apathetic public and give it a greater presence on the global stage only to then shackle him or her for fear of upsetting internal balances.

As the Dutch daily De Volkskrant put it in a recent headline: “Europe chooses: chief or messenger boy.” Given some of the names that have been mentioned as alternatives to Blair – Luxembourg Prime Minister Jean-Claude Juncker, Dutch Prime Minister Jan Peter Balkenende, former Finnish Prime Minister Paavo Tapio Lipponen, former Austrian Chancellor Wolfgang Schussel, former Belgian Prime Minister Guy Verhofstadt and former Latvian President Vaira Vike-Freiberga – it seems the EU has decided there are too many indians to have a chief.

Presumably some of these politicians, if not all, are who The Economist had in mind when it referred to “the usual Europygmies.” Maybe, it’s a harsh assessment of men and women who are capable politicians in their domains, although hardly singular figures, but it underlines the challenge the EU now faces in trying to select someone to fulfill a role whose purpose remains unclear and undefined.

At least something is much clearer now: rejecting Blair was the easy part, too easy perhaps.

This commentary was written by Nick Malkoutzis and first appeared in Athens Plus on November 6, 2009.