The
euro lives, but unity is
dead By Francesco Sisci
BEIJING - Greece is saved and the euro
sound. Yet it is the European Union that has
fallen apart in the most recent round of the
crisis on the old continent.
The bet
that the International Monetary Fund (IMF) made with the
eurozone on Greek debt paid off. Initially, Europe
wanted only the IMF to intervene, but the IMF
replied that it would step in only if Europe was
committed to rescuing Greece. In other words,
Europe refused to save Greece on its own, and it
wanted an extra-European intervention to solve
Europe's most critical problem.
This was
not because Europe lacked the funds or instruments
to support Greece, but because it lacked the
political will necessary
to rescue the euro's
weakest link. In other words, Europe refused to
resort to political instruments to solve the
European crisis. It wanted, rather, a purely
economic solution that wouldn't bring the
continent closer together politically.
The
crisis of the European continent, which was in the
end a political crisis about differing fiscal and
financial policies and rates of productivity in
member states, was not solved by addressing the
political issues, but by finding a solution based
on continental and extra-continental accounts. In
fact, Europe didn't want to intervene in Greece,
it wanted the IMF to do it, and paradoxically, it
wanted the IMF to force the hand of Europe to move
into Greece.
Many Europeans were hopeful
that the economic crisis would bring Europe
together, and Germany would find the will to lead
a greater Europe. Yet, this didn't happen, and
possibly will not happen in the near future.
Greece had to be saved not for the sake of Europe
but for the sake of the Atlantic alliance.
Greece, out of Europe, would have thrown
itself at the mercy of the Russians, who are a bit
too eager to embrace the old cradle of the
Orthodox faith and possibly to give Athens the
necessary credit to rekindle its economy and
create a naval base for the Russian fleet in the
Mediterranean. This base is presently located in
Syria, torn by civil war and threatening to fall
apart - and thus putting at risk Moscow's only
foothold in the Mediterranean.
Moreover,
in Germany, as economist Francesco Giavazzi had
been arguing, Chancellor Angela Merkel is moving
to the left as the September 2013 federal
elections approach. She needs to undercut Social
Democratic opposition with clearer support for the
euro, a currency that, despite all of Berlin's
reservations, Germans have grown to trust like the
old deutschemark.
These elements, however,
do not solve the basic issues of the present
crisis: the lack of unitary political will, and
thus the lack of unitary fiscal policies. In fact,
as many observers have grown to believe, the split
on the euro is not about money, fiscal policy, or
even efficiency, but it is about ideology, ways of
life, customs, and cultural habits.
In the
Financial Times on November 21, Joshua Chaffin
argued that the real split in Europe is between
Northern European countries that believe they can
grow within the present monetary constraints and
countries in the south (like Italy, Spain, and
France) that believe present constraints make it
impossible for Europe to grow.
In the
middle of this crisis, most countries, in the
North and South, think it is impossible to push
forward a unified policy, whatever it may be, and
it would be easier to just split up. David
Cameron's UK is moving in this direction. Britain
thinks it cannot put forth its ideas about
European management, and thus it may well pull
out. If it defects, in theory it may not be a
mortal blow to the unitary currency, as the UK is
not part of the eurozone. But the movement toward
breaking with the European Union could be just as
serious a blow for the political unity of the
continent.
Within the eurozone, there are
localities thinking of splitting from their
present nations. Catalonia believes that breaking
from Spain would increase the chance of its own
survival while staying within the euro area. If
the Catalonia referendum were to declare it
independent from Spain, this could start a
movement of other rich areas in poor countries who
seek a better fate on their own within the euro
area. In fact, if Catalonia today and northern
Italy tomorrow were to break the national unity in
their respective countries, the rest of Spain and
the rest of Italy could be left with little or no
strength to face their present and future
financial difficulties in Europe.
Problems
of breaking up the unitary currency would be
multiplied after the UK's and Catalonia's
pro-independence decisions. Is there any other
way? The euro is safe, but Europe may be dead.
That may be the best result many people in and out
of Europe can expect from this crisis. But this
leaves also a huge political vacuum in the old
continent. In the general scheme of global
affairs, this European setback may not count for
much. After all, Europe is no longer the border
state having to face a threatening USSR and/or the
Middle East.
At present, Russia is no
longer a threat to the world like the Soviet Union
was. The Middle East, with or without its Jasmine
Revolutions in Libya, Tunisia, Egypt, and Syria,
has failed to disrupt the energy supply to the
West, and security-wise it is safely under Israeli
and Turkish watch. Moreover, in the long term, the
discovery of huge shale gas reserves in the United
States will free America from dependency on the
Middle Eastern or Russian oil. These short- and
long-term issues make Russia and the Middle East
less and less relevant for America, which has been
refocusing its attention on Asia, the area of
future global economic growth.
This leaves
the European countries saddled with the euro but
without European political unity, with the Middle
East steeped in deep and useless internal torment,
and with the neighboring Russian giant still
seeking its own destiny. But this Europe in this
Mediterranean is bound to become marginal in
global affairs over the next decade as the world
refocuses on the Pacific.
Is this the
destiny Europe wants for itself? The Europeans
will have to decide on that.
Francesco Sisci is a columnist
for the Italian daily Il Sole 24 Ore and can be
reached at fsisci@gmail.com
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