I am on my way to Greece and tomorrow I will be in Athens. This made me think of what is going on and I decided to come back to this blog and write something. The Greek crisis is a drama that could end (or start) in tragedy. There are many aspects of the process that will culminate with the referendum taking place July 5th, 2015. Before getting to an analysis of the rationality of decision making (please wait for my next post), let me try to outline a tentative framework (this post). I will try to state some facts and spread comments around them.
Greece is currently facing dramatic economic and social distress, probably one of the worst of its modern era. This is the result of a mix of wrong policy recommendations and superficial implementation of change mixed with political uncertainty and instability. It makes little sense to recriminate on the cause of the current situation, and consequently blame this or that institutional agent. The only important aspect is that there is a serious problem that needs to be taken care of. The problem is not just important for Greece, it lies at the heart of the European Union. This is for at least two reasons, the first is rooted in history, the second in democracy.
First, the crisis demonstrated that the single currency project needs to be implemented in its different legs. The monetary union makes little sense without a political executive power that controls it. This is nothing new. The European Single Act (from where the project originated) states the political plan clearly. Subsequent steps along the way, especially in the Nineties, also refer to the single currency as a step towards a political union. When the Euro was born, we would still hear many politicians making clear statements on the upcoming political integration. Something happened in the turn of the millennium. Three factors may have caused this lack of memory:
1. The rise of political parties that had been relegated to a 'limbo' for the fifty years following World War II. These parties are either detached from the traditional moderate centre-right PPE-like style because their roots are fascist, xenophobic, racist, and reflect the core of what has always characterized the history of European politics in the last three millennia. This can be summarized as: (a) find a 'good' enemy ('good' in the sense that is a likely enemy, appealing to citizens), (b) radicalize the party's position, and (c) be verbally ruthless and, sometimes, physically aggressive. All in all, these are building a positive attitude towards conflict (or, if it goes bad, towards war). Of course, these politicians have no interest in European integration.
2. The other politicians from the 'regular' European parties have lost contact with the founding values of the European Union. World War II is very far from us now, we do not think of peace very often, nor we reflect on what an amazing achievement it is for Europe. We take it for granted. In the last fifteen years, most politicians are not 'sons of war', meaning that their grandparents took part to the war, not their parents. Most of grandparents are not with us any more. War is unexperienced but it is still conceivable among European states. The first wave of the European integration process is over.
3. The many waves of the process called 'enlargement' brought in the EU many Eastern and Southern European countries. This is certainly an extremely positive factor that witness the inclusive and open nature of the integration process. It also reflects the importance that solidarity and cooperation has for the European Union project. However, EU enlargement, matched with the economic crisis and an insufficient change in the institutional decision mechanisms, contributed to very slow progress. Clearly, most of these new members are not interested in a more advanced integration. Being part of the EU is already a significant step ahead in integration/unification for most of them.
On a different angle, the deep economic depression destabilized the process. Among the many implications of that event, one seems to have been the emphasis on the technical over the value-driven side of problems. Of course there is always a very important technical side, but technique is nothing — maybe even dangerous — if it is not at the service of ideals, principles, or values. The desperate search for a technical solution that could 'save us' (and our economies) brought politicians to completely lose sight of the underlying values of their actions.
Second, the Greek crisis shows something rather obvious. The form democracy takes at the European level is still underdeveloped. There is a need for quick and effective action that cannot be guaranteed by a pseudo-executive that is, for example, the collection of finance (or the prime) ministers of the eurozone. They represent the interests of their nation states, not those of the eurozone as a whole. Moreover, among the many issues, there is a disproportion in that small states are represented the same way as large states (i.e., one minister per state). This is not the place to propose a solution for this (there are, indeed, many), just to point at the fact that the current state of affairs has proven to be ineffective, and repeatedly so.
This underdeveloped democracy at the institutional level (so-called 'democratic deficit') seems to cause confusion, even to the eyes of the most expert. In fact, many blame the European Central Bank (ECB) or the single currency for the inability to deal with the depression and for the crisis in Greece. The ECB and the euro, many say, are designed to preserve the strongest economies, i.e. Germany. This is undoubtedly so. I would add, just like the dollar preserves the economy of California, first and foremost. Just like the British Pound Sterling is very much tailor-made to protect and enhance financial London. The difference? Well, traditionally European countries have been different and Europeans still believe that the other states are 'foreign', their citizens are foreigners, strange, other, different. This is the problem. But there are positive externalities for the other states when the Californian economy goes up. And there are positive externalities for other EU states when the German economy goes up. The point is that we do not have an executive power that counterbalances that of the ECB. This is the real issue here. Do not look at the ECB (the finger), go deep, look at the lack of democratic representation in European institutions (the moon).
Finally, the Greek crisis bears the risk that Europeans won't be able to find the second wave of integration. However, we all need a stronger and better union. The alternative is the old bloodthirsty Europe that we all hope to leave to history books. Of course, there are economic, social, research, developmental advantages of a deeper union, but they cannot be seen if there is no clear understanding of what Europeans want to be.
What I outlined here constitutes the framework to understand under which conditions rationality works among parties who try to find a solution. As I tried to outline in this post, a solution is much needed by every single player involved in the process.
