[T]he real threat of a Greek default is in the example it would set.
Citizens of other European nations would see the chaos; they might
figure that their savings would be safer in German, rather than
Portuguese (or Italian) banks. Bond investors might feel the same;
yields would rise further. Official creditors (including the ECB) might
take a hit, making it even more difficult for them to participate in
other bailouts.
For all the bluster, one can't help feeling the tough EU stance is a
bit of a bluff. They can't view a Greek exit with anything other than
fear.
What happened in the last few days is something quite shocking to the
Eurocrats. Someone actually asked the people of his own democratic
country if they approve of deep and lasting austerity as a worthwhile
price to keep the euro. So finally, we have a rogue force in EU
decision-making: democracy. I know there are enormous systemic risks in
delaying the implementation of the deal made last week; but there are
also profound long-term risks in pushing for the deeper European
integration required of this crisis without popular, democratic consent.
I'd prefer temporary chaos that can cede to a democratic reality;
than a papered-over deal, hated by the southern European population,
that could lead to a populist explosion down the line, especially if
another recession hits. We're already seeing the paradox of accelerating
the loss of sovereignty past the popular national will: you actually
increase nationalism and division, rather than ameliorating them. In
other words, the EU begins to defeat its own reason for existing.
And, yes, this has already begun to happen. Sarko's and Merkel's
thinly veiled contempt for Greece prompted memories of the Nazi
occupation to be revived in Athens. Britain's Tory Euro-skeptics are
beginning to flex their muscles again in the British parliament. German
voters may soon reach the real end of their patience with the Greeks and
Italians. And more and more, we keep hearing of the next domino that
could fall. France?
Andrew Sullivan, The Dish, The Daily Beast
No comments:
Post a Comment