All these words are Greek — crisis, chaos and apocalypse. Or, if the world was more clever, this could still end in catharsis and renewal.
Market furies tear the heart out of Europe, first Greece, then Spain, Italy and France, and finally the world — so even beleaguered pro-Europeans give the euro’s survival no more than a 50:50 chance.
If all that is left is a tight little German and northern league, why would the EU stay together after that?
The guttering flame of the European idea is hard to keep alight in this hurricane, but it is not impossible. Look how decisively the French and Greek electorates reject the austerity economics that is killing growth in most of the EU.
The tide of opinion is turning when even Standard & Poor’s at last admits: “Austerity alone risks becoming self-defeating.”
The policy is tested to destruction. A patched-together coalition between old parties that brought Greece to its knees through corruption and cronyism only won because its pledge to get a better deal was marginally more convincing to a despairing electorate, short of food, medicine and fuel.
However, anti-austerity was the only message. Either default on debt or repay only once solid growth makes it feasible — more austerity leads back down the death spiral vortex.
If the new Greek government gets no genuine relaxation of impossible bailout terms, more cuts may propel such protests that the radical SYRIZA will find itself in power shortly. How comfortable to be opposing, just a hair’s breadth from power. It was not sour grapes (courtesy of Aesop, another Greek) for SYRIZA leaders to claim this is where they prefer to be for now.
Meanwhile in Britain, gleeful anti-Europeans gloat: “I told you so,” with smirks on the faces of Norman Lamont, Nigel Farage and the rest.
British Prime Minister David Cameron on Monday yet again wagged his finger emptily at Germany, telling it to intervene, a bizarre stance from one who shares its austerity policy. In all the years of behaving badly to its neighbors, Britain has never been so ignored or so irrelevant to the key decisions taken by its vital trading partners.
Despite sad reminders of former British prime minister Gordon Brown’s worst traits at last week’s Leveson hearings, compare and contrast Cameron’s vacuity with Brown’s finest hour — when no other leader stepped up, Brown galvanized the world to take fast action with a market-stunning ￡1 trillion (US$1.57 trillion) rescue at the G20 in 2009. Cameron could not galvanize a flea circus.
Instead, his party wallows in a European crisis that will blow back at Britain. True, the blizzard will conveniently white out British Chancellor of the Exchequer George Osborne’s egregious economic errors, the zero growth and double-dip. Roll on a referendum, urge the Europhobes, but in or out of what?
Their fantasy is that Britain can slip away to the European economic area on pick ‘n’ mix terms, undercutting EU currencies and irksome trade rules — why would Europe not wreak revenge for Britain’s obnoxious behavior all these years?
At the G20 meeting on Monday, no leader emerged to take the initiative, with US President Barack Obama being deep in a re-election campaign and each country protecting its interests.
Germany could save Greece, but not Spain and Italy. Germany could let the European Central Bank act as a firewall. It could allow inflation to ease the path and embrace growth before debt. However, faced by a choice between breaking the euro and abandoning German orthodoxy, German Chancellor Angela Merkel and her party would rather let most of Europe go — she has failed to warn her people of the enormous costs of that.