Ad hoc measures can not save the EU

2011-06-28

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Photo of Syntagma Square by Demitris Messinis (AP Photo)

Today is the day where the Greek Parliament will decide over a new package of austerity measures that are a condition for receiving the next payment of the loan. The new stricter measures are passed under the title “medium-term programme”, which is actually long-term since it is five years long and does not offer any prospect of recovery after that period is over since the measures it envisages will lead the real economy of the country into a vicious cycle of under-development. The Parliament is meeting amid a general 48 hour strike that has brought thousands of demonstrators in Syntagma Square (where the Parliament is).

The voices across the globe who are against the new series of austerity measures are increasing, to include intellectuals such as Jürgen Habermas who lately published an article on The Guardian. Mention against the austerity measures is even made in a recent report of the United Nations.

The fact that the Medium-Term Programme is a condition for receiving the next payment of the first bailout package, is from the outset unacceptable, as it puts the burden of a cross-European debt crisis on a single country. This of course does not take away the responsibilities of Greece, but is a mere reminder that European leaders should acknowledge their own responsibilities. They should accept that the problem is systemic and not regional.

The EU leaders do not want to accept certain realities and instead cling to their vaunted beliefs and their failing practices.

The so-called “Greek Crisis” is in fact a crisis of the single European currency (euro) and the bailouts are only a means of indirectly pumping private German and French banks with liquidity. It is true that money from the bailouts that are given to Greece, Ireland and Portugal goes to creditors, who happen to be major German and French banks. What would otherwise be politically impossible for German Chancellor Merkel and for French President Sarkozy, i.e. to pump their private banks with extra money (they did it back in 2009) has now become feasible through the “safety packs” that ostensibly assist countries.

At this point, I would not like to go into further detail as I first need to see the end-result of today’s discussions in the Greek Parliament. However I am sure that ad hoc measures that are not directed to addressing the whole problem at its roots, are definitely a wrong way to go.