The moment of truth
When Germany’s chancellor Hannelore Kraft met France’s president François Hollande in Berlin recently, they agreed on a compelling strategy to save the eurozone.india Updated: May 18, 2012 00:12 IST
When Germany’s chancellor Hannelore Kraft met France’s president François Hollande in Berlin recently, they agreed on a compelling strategy to save the eurozone. With no elections in any eurozone country for the next two years, they were able to stretch the austerity timeline for Greece, Spain and Italy, add some elements of growth stimulus, but also keep up the essential pressure for fiscal discipline and structural reform. As a result, even devastated Greece began to glimpse light at the end of the tunnel.
In our dreams, fellow Europeans, in our dreams. The reality is different. While François Hollande and Angela Merkel — not Kraft, the Social Democratic victor in last Sunday’s North Rhine-Westphalia elections and possible candidate for chancellor in 2013 — meet under thunder and lightning-torn skies, there is capital flight from Greece, fear and trembling in the markets, self-reinforcing talk of Greek exit from the euro and another month of uncertainty until another election in Athens. And everywhere, all the time, there is that tiresome old Greek invention called democracy.
Each country has its own home truth that its politicians are failing to tell. France’s untold home truth is that it is no longer an equal partner of Germany. Germany’s untold home truth is that it is going to pay for this mess anyway, one way or another. Greece’s untold, or only half-told, home truth is that its only alternatives now are bad, worse or worst. Worst is clearly an unplanned, chaotic exit from the euro. That may still happen. If it doesn’t, then Greek voters have a month to work out which they think is bad and which worse: a planned departure from the euro or remaining in on the best terms Hollande can help them squeeze out of Germany.
I simply don’t know which would be better for Greece. I’m also not ready because I’m not Greek. Democracy means people working out what government and policies are best for them. There is no European demos, therefore no proper EU-wide democracy, so the Greeks have to work out what is good for the Greeks.
Their May 6 election was a howl of anguish at the suffering the country has been put through. The next election will be a moment of truth: in or out. Should the country gamble that after the initial shock and losses of ‘Grexit’, its economy could grow again with the help of devaluation? Or should the new government negotiate the best deal it can get inside the eurozone, taking hope from the impact of Hollande and others?
These alternatives need to be placed as honestly as possible before Greek voters. Then they have to decide. Actually, that was the extraordinary idea people came up with in Athens about 2,500 years ago.
The future of the eurozone now depends on the choice to be made in Greece, the future of Europe on that of the eurozone, and that of the West to a significant degree on that of Europe. Is it too much to hope that, in such a moment, Greek politics will rediscover some of the grandeur and simplicity that was present in Athens at the creation of democracy? Probably it is.