Monday, January 30, 2012

The euro: more summits, more problems

January 29, 2012

Not for the first time, the eurozone is set to make a huge mistake. Actually, make that two: one political, the other economic. At its summit today European leaders will discuss proposals to force heavily indebted countries to gain EU agreement for their national budgets. More than that, it is understood that Germany is pushing for the eurozone equivalent of a modern-day viceroy to be installed in Athens to oversee any big spending by the Greek government. That last proposal was leaked to the Financial Times rather than announced by an official in Berlin, but it looks credible. It was certainly taken seriously in Greece, where the finance minister, Evangelos Venizelos, was moved to argue that "European integration is based on the institutional parity of member states and the respect of their national identity and dignity".

Even a watered-down version of this proposal – eurozone supervision of budget decisions made by elected governments of crisis-hit countries, which looks likely if not this week then soon – would represent a dramatic erosion of democracy and autonomy, to say nothing of national dignity. After the installation of technocratic regimes in both Greece and Italy, and the constant hovering of European and IMF debt inspectors in Athens, Lisbon and Dublin, the eurozone's democratic credentials have already taken a big hit. Yet when members of the German cabinet argue, as finance minister Philipp Roesler was quoted as saying yesterday, that "if the Greeks aren't able to succeed themselves with this, then there must be stronger leadership and monitoring from abroad", the implicit suggestion is that Greece needs parental supervision from the adults in northern Europe. However such language is intended in Berlin, it surely sounds highly insulting in Athens.


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