Coup de Troika

Coup de Troika

As the latest Greek tragedy unfolded two weeks ago in Brussels, one thing which constantly baffled me was the harsh and unbending positions adopted by some of the smaller EU members particularly Finland who seemed to be revelling in their 15 minutes of notoriety.

 

I could understand the Germans, who had over 56 billion euros worth of debt in the pot. I could understand that Merkel would find it difficult to sell more aid to the Bundestag. But she seemed to be playing a relatively “good cop” to Wolfgang Schauble’s “bad cop” and with some prompting from Francois Hollande it seemed that a sensible deal would be reached. It’s also worth remembering that France is owed some 42bn Euros, a not inconsiderable sum Frau Merkel.

 

The stances adopted by some of the smaller countries though seem to be utterly irrational. Yes, they were to an extent protecting their own needs, because every Euro which goes to Greece cannot also go to them, but this was way beyond that. I could even understand the issues of trust although it must be said that they predated the election of Alex Tsipiras and Syriza, and apply to the Greek right who formed the Government until January as well.

 

The previous bail outs saw Euro zone governments give Greece 52.9 billion euros in bilateral loans under the first bailout agreed in 2010, known as the Greek Loan Facility. Under the second bailout agreed in 2012, Athens has received 141.8 billion euros from the euro zone’s financial rescue fund. Note that Syriza, who are supposed to be the big baddies only came to power this year.

 

This deal effectively removes democratic control from the Government of Greece and places it firmly in the hands of the Council of Ministers. Not even in the European parliament.

 

Maybe it is just me, but I can also recall when East and West Germany were reintegrated and the economic sacrifices made in the name of Solidarity. That new Germany has been a major, if not dominant, force in enlarging the EU and the Eurozone over recent years. It was a dominant economic force in lending to the Greek banks and I am old fashioned enough to believe that if you lend to someone who you know cannot afford to repay then you are just as irresponsible as the borrowers. And that you should have to shoulder that responsibility when the day of reckoning comes.

 

This deal does indeed amount to an effective Coup and there are several other major European countries that have had to apply for bail outs in the past who might just be wondering what kind of monster they have created. What happens if Spain or Italy needs a fresh bail out? Neither is exactly a model of political stability. Will they be “trusted”?

 

But I keep coming back to the newer members who have economies which share many of the same characteristics as Greece. Many of them are not exactly industrialised, are largely agricultural and to varying degrees struggling to cope with the fiscal demands of the Euro particularly those escaping from Soviet style economic models.

 

What was the motivation for Finland, Latvia etc to take such a harsh stance? Were they just doing Germany’s dirty work for them? How long before a different crisis envelopes them? Perhaps from an Easterly direction. How much “solidarity” can they expect, how much will the very concept of “Europe” matter? How much for “democracy”? Would they have been willing to take the legislative dictats with just three days to pass laws? What’s the point of elections if the “Troika” are going to dictate what laws you will pass and when?

 

Have these Governments no memory of other historic debacles: Munich (1938), where peace was won by sacrificing the Czechs; or Versailles (1919), where the creditors got their money, only to create the conditions for the collapse of German democracy 10 years later, and their own diplomatic unity long before that.

 

All my life I have been an advocate of first the Common Market and then the EU, but for the first time I find myself having serious doubts about the whole project.

If an International Institution can set out to effectively implement “regime change” because they do not like the democratic choice of a people is that an Institution I want Scotland to be part of?

 

Make no mistake this was not just about ensuring that the Greek Government kept to its promises. By forcing the Greek Government to place their national assets into a privatisation pot, by taking micro economic decisions on employment practices, its bakery regulations, the funding of its state TV service etc  this went well beyond anything required and became the overthrow of a Government. Sure, Tsipiras might well survive, mainly because the Greek right is about as effective an opposition as the Labour Party, but he will be that the famous phrase “in office but not in power”.

 

And yet here we are and it is impossible for me to understand why it was the smaller countries, with little or no debt of their own in the pot who became if not the Camp Guards at least the Capo’s of what one right wing paper headlined “Greece in Auschwitz: Schauble attempts eurozone holocaust”.

 

I suspect that the final outcome of the deal might well be many, many more votes to leave the EU not just in the UK referendum but in General Elections across Europe for many years to come. The EU might just have brought the whole project to a grinding halt.