Self-bailout isn’t an option

The European Union is incessantly crossing narrow paths. Established sixty years ago (European Steel and Coal Community, 1951) to create a single economic market, the EU now risks stumbling against the attempt to safeguard the single currency. The financial instability sparked off in America with the 2008 crisis has weakened the real economy in EU 27 thus causing plummeting unemployment rates. It shattered banking systems and heavily affected public finances at national level. No European country has escaped the wounds inflicted by swinging deficits and sovereign debt, which reached gigantic proportions after only three to four years. Uniting forces. Before these scenarios it must be acknowledged that EU institutions – notably Strasbourg’s Commission and Parliament – were among the first to launch a cry of alarm thus identifying a possible way out by means of supranational financial governance. But EU27 national governments were the real obstacle along the way, given their -comprehensible- yearning to solve national problems rather than identifying efficient, long-term remedial measures. The only option is uniting forces and undertaking joint action. It has been said and written umpteenth times, also within the European Council seat (formed by EU Heads of Government or State, the most important decision-making body in Brussels). Moreover, no European country can address the global crisis alone, not in the areas of economy, migration, terrorism, and not even as relates to energy purveyance. But words have not been followed by facts. Hands extended to Athens. In this framework, the Greek question is emblematic. Athens is paying the dues for its flaws at national level, but it equally carries the burden of the consequences of the global crisis. Burdens weigh heavily on other European countries such as Portugal and Ireland, while also Italy and Spain are in the firing line. Threatening clouds are hovering over solid nations and solid economic systems, from France to the United Kingdom, from Denmark to The Netherlands, causing unemployment, state budget deficits, political instability and electoral reversals. The present catchphrase is “to save Greece is to save the euro” (and the EU). But in the future the problem could extend to Lisbon, Madrid, and who knows where else. Institutional steps. Institutional steps to rescue Greece have already been made and the EU (through the central Bank of Frankfurt, the Commission, in agreement with the International Monetary Fund) has already poured large sums of money into Greece’s bailout. But now a further 8 million euro are needed to pay salaries and ensure public services in the Mediterranean country, which in return is asked to adopted further measures aimed at cutting public spending and redressing public finances. It is necessary to act quickly with the adoption of the EFSF, (European Financial Stability Facility), due to undergo ratification by 17 euro zone countries (a voting session in the German parliament is scheduled at the end of September, representing a crucial step in this direction). Specific growth-boosting measures should then be identified. The matter will be debated by the European Council next October 17-18, also in view of the G20 meeting scheduled to take place November 3-4. States and statesmen. These are not painless steps for the EU, tasked with Greece’s bailout, nor will it be easy for the Greek citizens that will have to make great sacrifices. These are necessary decisions, which also German Chancellor Angela Merkel has finally decided to support (“if the euro collapses, so will Europe”), although it will almost certainly negatively affect national politics, considering the negative outcome of the Chancellor’s party, the CDU – which co-chairs the coalition with the Liberals – in the last elections. Statesmen’s stature is determined by their farsightedness, a feature of German predecessor Helmut Kohl, who boldly defended the decision to create the single currency. Three corollaries. In this framework, three corollaries emerge, which shouldn’t be underestimated. Firstly, there appears to be the need for a European policy that is strong at internal level, capable of creating a credible role for itself in the global scenario. Only in this way will the EU be capable of establishing a dialogue as “peers” with the US, China, India and the other giants emerging in this historical phase. Secondly, also the United States – notably President Obama – are expected to possess the virtue to look beyond their borders, and beyond their interests. The world crisis was generated in the States, and this requires that the US assume greater responsibilities. Lastly, as relates to Turkey’s threats to Cyprus, Greece and the EU: Ankara has to decide whose sides it wants to take. Does Tayyp Erdogan’s government yearn to be among the globally prominent countries, contributing to political stability and international peace (continuing its path leading to the EU), or does intend to confine itself within a dangerous nationalist enclosure?