The Opinion Pages | Contributing Op-Ed Writer
This story is included with an NYT Opinion subscription.
It’s Time for Greece to Leave the Euro
This story is included with an NYT Opinion subscription.
HAMBURG, Germany — DOES democracy trump debt? Of course not, not even in Europe. No bank clerk here would be impressed if a family told her that they had voted to have the terms of their housing loan renegotiated — that’s not how loans, either personal or international, work. Yet leaders are gathering for a special summit meeting in Brussels on Tuesday because the Greeks have done exactly that: voted against the conditions the eurozone demands for a third bailout program for their country.
Of course, negotiations are a good in themselves, especially in Europe. But even in Brussels, there comes a time when losing your nerve is a rational choice. I don’t say it lightly, but I believe this point is here now. Europe has more to lose from a Greece that remains part of the eurozone than from a controlled exit, in which Greece softly steps out of the single currency.
Europe is a contract-based community of states that permanently agree on mutually beneficial rules, with the finest privilege (for those who do economically well enough) being membership in the euro club. What now is the greater threat to this project: a loss of a currency club member that, in the eyes of many, had been brought on board by mistake? Or, in scrambling to keep it in, the spread of an attitude whereby contracts count for little, and rules count for even less?
True, Mr. Tsipras sacked his controversial finance minister, Yanis Varoufakis. But one ideologue fewer doesn’t make this government less ideological. As childish as it sounds, Mr. Tsipras and his fellow fighters are still raging against the triviality that you can spend only what you earn. Leaving aside Syriza’s Nazi-Merkel comparisons and accusations of “terrorist” behavior by creditors, over the past five months Europe has heard way too much from his government about the impossibility of further cuts and way too little about possible sources of new income.
A big part of the blame for this mess rests on the shoulders of the chancellor of Germany, Angela Merkel herself. Her statement that “if the euro fails, Europe fails” was understood by Athens as a carte blanche: Greece’s euro membership is obviously priceless to Europe’s most powerful leader. From then on, all credit negotiations between Athens and the eurozone resembled a poker game with the German cards in the open. The fail-fail sentence was easily the most stupid public statement that the usually cautious Ms. Merkel had ever made.
Still, patience with Greece in her party, the conservative Christian Democrats, is waning rapidly, as it is in Germany’s staunchest economic allies, the Netherlands, Finland and the Baltic States. To many Northern Europeans, both the Greek government and the Greek people have finally demonstrated that, according to them, no given rule is ever fixed. This mentality is not just alien to the rather Protestant northerners. It also holds a danger for Europe’s political fabric.
Right now many observers are fixated on the risk of Greece’s exiting the euro. But the risk of keeping it in at all costs is even higher. Consider this scenario.
Unemployment in Italy, Portugal and Spain remains high, and anti-European Union populists are on the rise in all three. The conclusion that people there could draw from a third bailout program for Greece would almost certainly be that voting for radical parties and obstructive behavior are eventually rewarded. You just have to be cocky enough. And if that happened — if, say, a Syriza clone came to power in Spain, or if the leadership in those countries expressed a strong sympathy for Greece’s position — the counterreaction in the creditor countries could be harsh, even hostile. Europe could end up with a calamitous north-south divide along camps known from the Cold War: the “socialists” there, the “capitalists” here.
Neither the eurozone nor Europe is best served by holding on to Greece. Instead, the European Union needs to come up with a smooth way out of its dilemma, namely an orderly exit by Greece from the euro.
This solution will be expensive, too — among other things, the European Union will have to make sure that Greece’s post-euro currency isn’t so cheap that Greeks can’t afford vital imports, like oil and medicine. Yes, Greece still must be rescued. But no, it need not be rescued within the eurozone.
No comments:
Post a Comment