Tattered flags of Greece and the European Union
The United States of Europe — Jean Monnet’s vision for the continent during the foundling days of the European Coal and Steel Community — is certainly not the reality of the present. Although the members of the European Union and the Eurozone have become incredibly interconnected economically, they still act largely as sovereign nation-states. Indeed, at this very moment, the tension between European governing bodies and individual states is playing out in Greece. This ongoing theatre of power politics shows that the problems of Greece are not just economic, nor are they endemic to this state alone; rather, they are the result of the deficiencies of the EU at its core.
As of November of last year, it seemed like Greece was coming out of its six-year recession, only to turn around three months later to another dispute involving its request for additional financial aid and Europe’s reluctance to grant it. With the unemployment rate, as of August 2014, around 26% and an economy that has contracted by a quarter since 2008, Greece’s financial condition is no laughing matter. Nor is Europe treating it as such. However, the extension of the bailout is showing the extent of polarization on policy matters concerning what would benefit the EU as a whole and what would benefit particular states.
Greece has found itself (in order to stay in the Euro) continuing to take orders from the more powerful economies in the Eurozone (most notably Germany), and so harsh austerity measures have been in place throughout the crisis. Spending cuts, tax raises, and an economy that has virtually ground to a halt have the people of Greece up in arms. This time three years ago, another austerity package was passed through the Greek parliament amidst violent and outright terrifying riots in the streets of Athens. The package called for around 15,000 public sector jobs to be cut and a 20% reduction in the minimum wage — measures which clearly strayed from the Keynesian medicine for stagnant economies.
In response to austerity, Eurosceptic parties are gaining traction across Europe, from UKIP in the UK to the National Front in France. Greece, for its part, now has a party in power that is not afraid to challenge Europe’s economic dogma. The far-left Syriza party, and its leader Alexis Tsipras, has vowed to renegotiate the bailouts and gain more autonomous control over Greece’s ability to help its own people. The support garnered by the party in the January 2015 elections came mostly out of a deep anti-austerity sentiment throughout the nation and a desire to get the hands of the “troika” (EU, ECB and IMF) out of the Greek government.
The feelings of Greece towards its largest creditor, Germany, are far from kind, and vice versa, more so than ever, there is sentiment in Germany to see a Euro potentially without Greece. Up until the final hour on February 20, there were intense negotiations on the extension of the bailout and austerity packages, which Tsipras promised to alter in favor of Greece’s interests. Germany, for its part, has acted as a responsible creditor and cannot be faulted for having a strong economy, which is only weakened by this ongoing problem in Greece, where it has largely been in charge of footing the bill. On the other hand, however, it is clear that these austerity measures have failed to boost Greece’s economy enough for it to make a sustainable recovery.
Herein lies the true divide within the EU and Eurozone — the countries are economically connected, but politically they still see themselves as completely different entities. The EU, for example, has continually stemmed efforts to create a constitution, and has continued to favor “treaties” among member-states. This terminology alone shows the desire of individual countries to remain separate, and to retain their full sovereignty. In light of growing nationalist movements, such as the Scottish Independence Party and other Eurosceptic parties, it seems that a federal union is still far down the line for the EU.
Though a deal was reached between Greece and its creditors, and the bailout was extended for at least four more months, this does not mean there will be smooth sailing ahead. Greece’s creditors are still asking for further austerity measures, and plan to withhold funds until these measures are met.
The problem in the European Union is the lack of European unity. While the strongest economies in Europe all boast powerful welfare states, they insist that Greece dismantle its own at a time when Greece’s people need it the most. Due in part to Europe’s almost single-minded concern with the bankroll, the current situation was born. This is not to say that Europe is not concerned with the well being of the Greek people. However, because of the overarching lack of unity across the continent, this situation has been posed as the “Greek Problem,” not a “European Problem.”
Caroline Isleib is a senior in the School of Industrial and Labor Relations at Cornell University, with minors in Economics and European Studies.
Image Attribution: “Double Trouble” by Theophilos Papadopoulos, licensed under CC BY-NC-ND 2.0