Almost 31 years ago the French President, Francois Mitterrand, and the West German chancellor, Helmut Kohl, visited the former battlefields of Verdun in north eastern France.It was a moment of deep symbolism: here, where as many as 750,000 men had died during World War One, the French and (West) German leaders held hands as the Marseillaise was played.
Both had been personally affected by warfare. Kohl had lost his older brother during World War Two, while Mitterrand’s war years had been…rather more complicated. Nonetheless, as the leaders stood side by side the idea of a peaceful, united Europe was reinforced. Five years later, the Berlin Wall fell. As part of the process of building a broader and deeper Europe, including the unification of West and East Germany, the drive towards the long dreamt about idea of a single currency was intensified.
If you had said to Mitterrand and Kohl that, a decade and a half after the launch of the euro, the future of the currency and the EU itself might be threatened by a country which represented 2% of eurozone GDP (and less than 1.5% of the EU), I suspect they would have been pretty startled. The economics of all this may be worrying. The political mismanagement has been calamitous.
The next 72 hours could be decisive. The European Central Bank, one part of the troika together with the International Monetary Fund and the European Commission, must now decide whether to increase, maintain or cut off its emergency liquidity assistance (ELA), which is preventing Greek banks from collapsing. If there is no increase Greek banks will have to remain shut, with capital controls in place and a strict limit on daily withdrawals maintained.
That does not sound like a sustainable option. Cash in the Greek economy will dry up, transactions will cease, suppliers and employees will not be paid, food and medicine shortages will increase – in short, a complete slump and breakdown. It is just possible that the Greek Central Bank might be able to start printing its own euros, but it is not clear that this could happen and, if it did, what the consequences for the rest of the eurozone might be.
Something has to give. We are heading either for “Grexit”, with Greece being forced to abandon the euro and launch its own currency, or a (partial) climb-down from the troika. It is that stark: kick ’em out, or keep ’em in. The former looks more likely for now.
If so, what is Europe – the European Union – actually for? Can the democratic wishes of individual member states be countermanded at any time by a powerful core? Does solidarity mean anything at all? Or should that notion be buried alongside the war graves of northern France and simply forgotten about?
The Greek mess has been a long time in the making, and is hardly the fault of the current government, which has been in power for only a few months. Greece’s admission to the euro in the first place was a political fix. Its continued membership a concoction of increasingly dodgy loans. But it is in – for now. And its people have spoken conclusively: they want to stay in the euro and renegotiate a more reasonable (and believable) way of paying back debt as best they can.
Other EU member states, which have coped with their own austerity programmes, are unhappy with the idea of Greece getting, as they see it, an easy ride. The German government, and some figures in the Commission, have been equally determined on this point.
But there is a bigger issue: democracy itself. The EU is already losing respect and even legitimacy in the eyes of many of its citizens. While nationalistic and far right parties have been winning support in some member states, at the same time the EU risks becoming inert and ultimately ridiculous. The cause of euroscepticism can only be helped by this growing sense of chaos and impotence.
If EU leaders believe their organisation is worth saving and fighting for they need to demonstrate that membership of the EU means something, in democratic and political as well as economic terms. If the Commission doesn’t think Greece should properly remain a member if the EU it should say so. Other countries and eurozone members will draw their own conclusions about their prospects for continued membership, and how meaningful a club this still is.
The post-war dream of a peaceful, flourishing, collaborative Europe has almost died. The Greek drama has made this clear. It is an existential crisis for the idea of Europe as we have known it. Do our leaders care enough to save the idea of Europe? Or is the dream finally about to die? We may find out the answer the to these questions in a few days’ time.