Sunday 12 July 2015

Euro-summit

I'm driving past the Commission today on the eve of what is likely to be one of the most important EU summits ever held (the Grexit).  Security is tight.  Europe's leaders seems to be really divided on the issue of whether to keep Greece in the Eurozone or push it out. The Greeks are damned either way.  Either they stay in and face a far more stringent austere package than they voted oxi to last Sunday or they get pushed out - their economy goes into free fall and nationally-owned institutions get comprehensively asset-stripped.  Perhaps with a devalued dracma they can rebuild their eceonomy faster than staying in (people are takling about Argentina's example, but the switch there wasn't nearly as dramatic - they actually had a currency in place) - but in the short term the consequences will be horribly painful. Either way the Greek future looks grim. 

But for the EU as a whole it raises bigger, more strategic, questions.   There are most definitely both hawks (the Finns, the Baltic States and others who think Greece should be kicked out of the Euro zone) and doves flying around (the French are trying desperately hard to get them to stay in).  Since the early Benelux agreements what is now the EU has been expanding, and over the last 25 years this seems to have been more for political reasons than economic ones. When the Euro was created there were several states whose inclusion was the subject of much debate (Greece being one of them) but much was made of inclusivity. I   I can't help but feel that if the Greeks are foced to leave then the EU will have symbolically have turned a corner and the talk of unity and a common cause will start to sound like empty rhetoric. 

No comments: