Did the eurozone crisis really happen?
Was it not really a Greek crisis that, poorly managed for lack of adequate instruments, endangered the single currency? The answer is no longer in doubt: a little more than five years after the then Greek Prime Minister, George Papandreou, called for help from his partners in the enchanting setting of the island of Kastelorizo, the country, lack of sufficient reforms, is still unable to access the financial markets. And the eurozone does not know how to go out of the quagmire Greek as shown by the multiplication of summits of “the last chance”. The majority of Europeans are only certain that a “Grexit” would be catastrophic for Greece and perilous for the eurozone.
Ireland and Portugal have shown that the crisis in the euro area was, in fact, a Greek crisis: faced with serious problems following the US financial crisis- avoid financial crisis with payday loan consolidation, they would never have been deprived of access to markets, 2010 for the first, early 2011 for the second, if Greece had not previously fallen, which caused an unprecedented panic among investors. These two countries then made sacrifices equivalent to those of Greece in order to restore their public accounts and, after three years, they came out of European financial assistance, as planned. They even have the luxury of preparing the International Monetary Fund (IMF), the very one that Athens threatens not to pay on June 30 … Cyprus, which stumbled in 2013, is also on the road to redemption, just like Spain which, attacked as a result of the bursting of the housing bubble, resisted alone and implemented particularly harsh reforms.
There is thus a Greek singularity, which each of the actors of this crisis knows perfectly well for a long time.
At the end of 2000, admitting Athens into the single currency, the Member States, the Commission and the European Central Bank (ECB) were aware that it was lying about its figures and that the state of its economy did not allow it to share the same currency as Germany. Moreover, as early as 2005, the new Greek Conservative government officially acknowledged halving its public deficit for four years without any reaction from its partners. Rude lies that continued until 2009, too late to react effectively, the 2007-2008 financial crisis has changed the game. This voluntary blindness to Plato’s homeland, to use the expression of Valéry Giscard d’Estaing, who, in 1981, made this country join the EEC, is even older: “Greece, is our Club Med, we will pay, it’s not a problem, “explained coldly, in 1991, Pierre de Boissieu, one of the two French negotiators (with Jean-Claude Trichet) of the Maastricht Treaty, to journalists who questioned the capacity of this country to join the single currency.
So there is something obscene to hear today European officials rant against a country they knew perfectly defects and limitations: a clientelist state, bureaucratic and corrupt, a closed economy, structured around a public sector inefficient and very small, weakly innovative and low-exporting firms. It’s not just about improving here or there, but rebuilding a country on a new foundation, which takes time. For example, Central European states have taken 14 years to meet Western European standards and catch-up is far from over.
The temptation, especially in Germany and the northern European countries, is great to repair the mistake made in 2000 by pushing Greece to the exit, which will serve as lessons for those who would be tempted not to follow the common discipline. But nobody knows how the markets would react to this euro zone’s inability to solve a problem that represents only 2% of its GDP. Is she going to amputate one by one her problematic members? Doubt so instilled could undermine confidence in the euro and be deadly.
The only reasonable choice is, therefore, to do everything possible to keep Greece in the euro, even if it will be very expensive: its partners have to give it time to rebuild itself and not to demand the impossible in the immediate future. In the meantime, the euro area must continue to integrate: after the creation of the European Stability Mechanism, the banking union, the economic government, the presidents of the Community institutions (Commission, European Parliament, European Council, ECB, Eurogroup) yesterday proposed establishing democratic control and creating a European treasury by 2025. From this point of view, Greece will have, in a way, rendered the euro a service by showing that it could not survive without a federal political integration: the bankruptcy of a euro area state should no longer its existence, just as the bankruptcy of California does not threaten the existence of the United States.