Early this morning Greek MPs voted in favour of a second set of EU imposed austerity measures which will enable an €86 billion (£59 billion) European Union bailout. The reforms include an overhaul of the judiciary system and changes to the Greek banking sector.
The fact the EU is dictating changes to such important domestic policies, with the democratically elected parliament merely acting as a rubber stamp, is a worrying precedent for all European nations.
The Greek Prime Minister Alexis Tsipras has regularly stressed he is not happy with the terms imposed by Greece’s creditors, revealing his government has been forced to accept the measures or else they would be forced out of the EU. In the face of such an extreme ultimatum he decided the loss of sovereignty over financial and domestic matters was preferable to economic instability. This was in spite of the Greek people resolutely rejected the EU’s proposals in the referendum a couple of weeks ago. Tsipras hopes this third bailout will resolve Greece’s economic woes, however the underlying truth remains: Greece cannot survive inside the Eurozone – and perhaps not as members of the EU.
The Greek crisis has removed the mirage of European unity. The ‘crunch talks’ revealed the fundamental truth about the EU: it is ultimately a battleground between the different EU nations. President Hollande of France and Chancellor Merkel of Germany may proclaim the European ideal, but their actions and words are driven more by their own political manoeuvres than any greater ideology.
The leftist Hollande, worried by the rise of Marine le Penn’s Front National in France has stressed his pro-EU credentials, whilst also sympathising with another socialistleader in Alexis Tsipras. Angela Merkel, whilst aware of the need to maintain the mirage of the EU being the unstoppable march of progress,is ultimately concerned more for German creditors and her own domestic standing than for securing a successful long term solution for Greece.
The majority of financiers and economists – including the IMF – recognise Greece’s debts are completely unpayable and need to be at least partly written off. However this would mean the German banks, who hold much of the debt with its huge interest rates, would lose out. So in the end the German Chancellor, against the advice of her own Finance Minister, has decided rather than accept the inevitable and allow Greece to leave the Euro – which would have undermined the European myth and led to a major default on its debts – it is better to pile even more austerity and debt on the Greek people and bail out the government once more.
In the long run Greece, and several other Southern European nations, will only be able to remain in the Euro if Germany and the European Central Bank are willing to occasionally bail them out. The fundamental difference in economic capabilities between the various nations means the richer ones will have to subsidies the weaker ones if monetary union is going to continue. Such policies can work where there is a shared identity across the union, as there is in America and the UK. Yet across the Eurozone this unity does not exist.
Greek MPs are stuck between a rock and a hard place. They can chose either to go against public opinion and take Greece out of the Euro and face being kicked out of office at the next election or they can give up their financial and domestic powers to Brussels (read Berlin). That they have chosen the latter option and have accepted becoming mere figureheads is unsurprising considering the current huge unemployment levels in Greece.
We may sit here in Britain feeling rather smug as we have wisely chose not to enter the Euro securing an opt-out in the Maastricht Treaty of 1992 but we should be very concerned about what is happening to Greece. The fundamental desire of the EU to control and direct sovereign European nations at all costs, means such a decision may one day face our own British MPs.
Claims the UK can opt out of this political union are misguided, all it will mean is that Britain will face the choice between giving up sovereignty or leaving the EU later. All nations who wish to be members of the EU will face this fundamental decision sooner or later, and it is for this reason we must Get Britain Out of the EU now.
Christopher Carter is a Research Executive at Get Britain Out.