Greek Debt Crisis: Bringing Up A Champion To Lead Further Europeanisation Process?

Posted on 04. September 2015

bySadik Tabar

sadik-tabarIt had been a long time since we could set eyes on a pro-government rally in the Syntagma Square in Greece. Since the Syriza took power in the beginning of 2015, as the Greek PM of new tenure, Tsipras tenaciously emphasised that the Greek debt crisis is essentially a crisis of the European Union. Tsipras also never accepted the image of Greece as a desperate state in need of an IMF emergency rescue package under creditors’ terms, even if the prospect of Greece’s bankruptcy was a real possibility throughout negotiations. As a reflection of the latest election and referendum, a majority of Greek people seem to stand with their government against international creditors. Tsipras kept putting forward one explicit argument during negotiations with creditors: the Greek debt is neither a Greek problem nor an economic problem anymore; it is a political problem (1) concerning the European Union and its future. In order to strengthen his argument, Tsipras called for a European debt conference (2). This is admittedly a valid criticism of the global economic system from a leftist standpoint. However, whom would Tsipras find as a competent authority within the European Union willing to take charge of such a radical process recommended by Tsipras?

When Tsipras called for a European debt conference, he seemed to draw parallels with Germany’s treatment after the Second World War, when it survived an even worse debt crisis through a debt restructuring conference. Back then, Germany’s debt was not only restructured but also reduced by 50% and stretched over 30 years, which limited the burden of debt repayments on Germany’s budding economic recovery and its capacity to create employment. Tsipras claimed that what had been offered half a century ago to Germany was more humane and realistic than what is offered to Greece today. And now, ironically, it is Germany that sits on the other side of the negotiating table.

But, how applicable or contestable is this Greek claim? There are two important aspects here: the North-South integration within the EU and the leadership that is needed to champion such radical initiatives for the Europeanisation process. Well, firstly, Greece is not the only country that is on the brink of bankruptcy, but it is the first to become insolvent. Member states in Southern Europe are, with no exception, in severe debt. We should remember that many Southern European countries once had limited debt capacity; and thanks to their integration into the European Union and its single market, these countries have increased their credit worthiness within the Union, which aimed to eventually decrease the inequality between the South and North. However, budgets of the member states in Southern Europe have gradually become exceedingly over-leveraged, more than what their national income capacity can balance.

This transformative power of the Union was once seen as a strategy towards a more unified and integrated Europe with more or less equal standards throughout the European continent. However, nowadays, the ideal of such a European standardisation is at stake. The fiscal policies implemented especially within the member states in Southern Europe are not able to sustain their debt capacity which has been over-inflated because of the Union’s transformative power. When it comes to the Greek claim, Tsipras is well aware that this south-wide debt crisis cannot be overcome through a technical process. He claims that the debt crisis thus needs a more political pillar; and, his approach of bringing the debt crisis to more political grounds would certainly address radical issues with regard to the future of Europe. Lately, that view has been gaining support in Greece as well as in other countries in the Southern Europe who may have to face similar crises in the near future. Demonstrations from all around Europe supporting the rallies in Syntagma encouraged Tsipras in this respect. So, then, if Greece was going to be left out of the Union, would it engender a wave of dismemberment in the Eurozone and the EU? Are Greek people still able to stand up for the Tsipras’ strategy? Or are there any other member states willing to support them? And, more radically, is the only effective solution the transformation of all these national debts into a European common debt, in similar to the transformative power once applied via the European Union integration process?

The second, and probably the most important question to be raised is who is going to champion such a radical debt transformation process. As the most powerful representative of the north within the EU, it is up to Germany to take initiatives in finding more concrete solutions for the European-wide debt crisis. However, German Chancellor Merkel, who is also widely treated as a sort of de facto head of the European Union, favours dealing with the Greek debt crisis through a quite technical crisis management strategy that has been followed up until now and has endangered the presence of Greece within the Union. Would Merkel spearhead such an initiative, recommended by Tsipras considering the clash between her conservative viewpoint on European issues and the claim and demand for radical changes on these issues that Europe is facing at the moment? Given that Greece agreed to an emergency package almost entirely on the creditors’ terms and thus bringing Greece in a harsh political atmosphere of snap election, would Greece’s rebellious momentary standpoint on the future of Europe be surpassed by the Merkel’s conservative viewpoint? Then, would it mean that Merkel is putting 60-years long ever-developing Europeanisation process at risk?

Europe is waiting/hoping for a champion who can combine the will, the vision and the courage to strive for a more integrated European culture and thought. Who will it be?