Europe dazed and confused
If the European Union had formed a united front to respond to the big problems of the energy crisis, things would be difficult, but less complicated and with less uncertainty for countries like Greece. However, the EU seems to be moving in the opposite direction: Every man for himself.
This has also been observed at the meetings of the European Central Bank (ECB), where the hawks are pushing for an increase in interest rates from 1.25% to 2-2.5% by the end of 2022 and for a switch from quantitative easing to quantitative tightening: That is, instead of the ECB repurchasing government bonds, to start selling those it has already has bought. That would put pressure on the European South, and especially overindebted countries like Greece.
The same situation is evidenced in the endless – running for eight months now – discussions for a joint response to the energy crisis, discussions that end up ignoring every rational and well-documented proposal and wasting time, with the result being that the strongest countries take advantage of the indecision and move to buttress their own energy security. That’s because “every man for himself” has specific implications: The strongest countries promote their own interests at the expense of further European integration and other states. Germany’s behavior is perhaps a typical example.
First, during the pandemic, of the total of 1.9 trillion euros of state aid that all European states gave to businesses, more than half (1 trillion euros) was the aid that Berlin gave to German businesses. Germany was rewriting the business map of Europe by distorting the single market and competition. European Commissioner for Competition Margrethe Vestager did not hear, did not speak, did not see any problem with this. German companies came out (unfairly) strengthened after the pandemic at the expense of those in other countries – especially in the South.
The strongest countries promote their own interests at the expense of further European integration and other states. Germany’s behavior is perhaps a typical example
The same trick is being repeated now: With 200 billion euros, in addition to the 100 billion already allocated, Germany is injecting a powerful new stimulus into the country’s industry, boosting it with 300 billion euros – an amount more than double what Italy and France have jointly given to the their own businesses. Commissioner Vestager is once again “keeping a watchful eye” on developments.
The European Union lacks the leading power that could pull it firmly into a different path of cohesion and solidarity. It is as if it is doing everything it can to get out of the crisis having paid a higher price than would have been inevitable, having suffered greater costs at the geopolitical, economic, social and political level, having less confidence in its own strength.
With an inadequate European Commission which remains silent at critical times and on key issues, with its president being led hither and thither and her re-election being her sole great concern, and with governments accountable to introverted and fearful societies, the European Union is not the stable environment we could count on as in years past.
All this is an additional, very serious, reason that we in Greece should have taken into account and subsequently buckled down. But we didn’t. Much of the political class and the media cultivate the delusion that we are a “fortified country.” Of course, this would not be possible without the irreplaceable help of the magic money tree. Because we might, rightly, blame Berlin for distributing 300 billion euros in state aid, but Athens has also distributed 57 billion euros in just two years – more than 25% of our GDP. But instead of this move delivering justice and economic growth, it left a strong sense of clientelism and it cultivated complacency. This is the worst we could have done for what’s to come.
