What Next After Tsipras Dashed Schäuble’s Hopes For Grexit?
Frank Hoffer
A Greek government forced to bow to the
impossible, a referendum brushed aside, the Franco-German partnership
damaged, European compromise diplomacy replaced by ultimatums, the euro
in limbo, large parts of Europe swept by anti-German fear and resentment
and another €83bn sunk into a doomed “rescue package”. Not quite how
successful policies are supposed to play out.
The worst thing about German policy is
not that it is harsh and uncompromising towards the “reform-shy” Greeks,
but that it is wrongheaded. Instead of sustainable debt restructuring
and support for real investment in order to gain the time and acceptance
needed for difficult and sometimes lengthy structural reforms, the
Greeks have once again been prescribed more of the same: keep cutting
till you collapse.
Pursuing this failed policy with Swabian thoroughness
and Prussian rigour has made Wolfgang Schäuble a popular figure at home
and an unloved German martinet abroad. In Europe, this policy has done
much to destroy confidence in, and respect for, Germany.
Admittedly, things could have been even
worse! Just imagine that Alexis Tsipras had actually made the populist
gesture of rejecting the Brussels ultimatum and the German finance
minister had got his “Grexit”. Greece would have imploded and might have
become ungovernable, and the euro as a unified currency would have been
history. Financial market speculation would have set its sights on
other European crisis countries and Germany would have been responsible
for reversing the European integration process. Thank Tsipras for
accepting utter humiliation rather than triggering a disaster.
His understanding approach has given
Europe what may be its last window of opportunity to change course. But
there is scant hope that the victors of Brussels will show the courage
and agility needed to finally deal with the basic flaws in the
eurozone’s construction. That would require a comprehensive regional
infrastructure policy, compensatory payments for the locational
disadvantages suffered by the peripheral Member States, jointly financed
real investment, but also a recognition that past mistakes must not, in
the long run, be allowed to block the future.
The Greek population has made great
sacrifices over the past five years in order to compensate for the
serious political and economic errors of recent decades. However, the
unprecedented income cutbacks have neither solved the debt crisis nor
improved the investment climate. State bankruptcy dangles overhead like
the sword of Damocles and the looming threat of expulsion from the
eurozone constantly brings about the flight of capital. All of which
frightens off any private investors. By voting overwhelmingly for
Tsipras and against the troika, despite bank closures and the threat of
economic chaos, the Greeks have shown that more austerity is simply
unworkable under democratic conditions. Future generations cannot be
held hostage for decades on end to answer for a corrupt elite –
especially as, for years and years, Europe turned a blind eye to Greek
improvidence, in which it cannot deny a certain complicity.
Anyone who, on the pretext of existing
treaties and their dictates, tries to ignore the unmistakable need for a
change of course in policy towards Greece is simply in denial.
The
austerity programme forced upon Greece, and to which there was allegedly
no alternative, is probably the first in the entire history of the IMF
to be regarded as futile even by the “mother of all austerity
programmes” herself.
In the interests of Germany and Europe,
there has to be a return, particularly in Berlin, to a pragmatic realism
in which the point of departure for political action is the complex
nature of European reality, rather than simplistic market thinking. How
come the German elite and the majority of the German people so
completely lost their European bearings during this crisis? Whatever
happened to the sure touch of former chancellor Helmut Kohl who felt
that, while money can usefully influence the course of history, narrow
financial policy objections must not be allowed to shape it? At two
trillion euros, the Kohl road to German unity was incredibly expensive,
but it was a great political feat. Just like the German currency union,
today’s European currency union cannot succeed without transfers to, and
real investment in, the crisis countries. No treaty, no bailout
conditions – however harsh – and no Greek government can do anything to
change that.
The Europe of all-night sittings,
countless negotiations and constant half-measures, but also of advancing
integration, is based on a culture of compromise between strong and
weak, between great and small. It is all about overcoming a European
history marked by competing imperial spheres of influence and big power
ambitions. Nobody has benefited more from this integration course than
Germany. After two catastrophic world wars and Nazi atrocities and war
crimes right across Europe, German dominance was no longer possible,
despite the country’s economic strength. To Bonn, political restraint
was in the state’s interest if, after Auschwitz, Germany was ever to
return to European civilization. This enforced modesty has proved good
for Europe, but above all for Germany. A country that is too big not to
be a power factor but too small to be a hegemonic force must be led with
great statecraft to ensure peace, friendship and security for itself
and its neighbours.
From Adenauer to Kohl, German
chancellors could wish only for what was right. Faced with limited
sovereignty, the Cold War and vivid memories of Kragujevac, Lidice,
Marzabotto, Oradour, Putten, Vinkt, Warsaw and all the other sites of
German war crimes, the Germans could not and would not convert their
economic power into a hegemonic claim to political leadership in Europe.
Once reunited, Germany regained its full
state sovereignty and became by far the most populated and economically
strong country in the heart of Europe. From now on, wishing for what is
right has become entirely a matter for Germany’s own sense of
responsibility. A far harder task, as not everything that is right for
Europe can immediately show a profit between the Rhine and the Oder.
Constant public justifications are required as to why supposed, but also
real, national interest and benefits should take second place to the
wider European peace project.
Either Europe will be based on democracy
and solidarity or there will be no Europe.
The idea that European
integration can be achieved by competition, through supranationally
institutionalized market power, is an illusion harboured by technocratic
dreamers. Reality cannot fit into the Maastricht corset. There is no
escaping the need for deeper economic and political union if the single
currency is to be preserved.
Germany now threatens to stray from the
successful path of integrationist modesty and pragmatic solutions. But
that is not a foregone conclusion, nor is it an unavoidable by-product
of greater power. Rather, it is a mistake. It is never too late to shift
course. In that regard, an important signal would be to complement the
lopsided third austerity package with a rapid, generous investment
programme. A German-Greek foundation for culture, education and research
would be a further step towards overcoming the envenomed feelings
between the two peoples, before those emotions harden beyond repair.
A change of policy requires new ideas
and, for the sake of credibility and trust, new faces sometimes too. The
Greek finance minister, who like his German counterpart, is blessed
with great intelligence and a certain arrogance, showed responsibility
and resigned at the height of his popularity in order to stay true to
himself, serve his country and not stand in the way of a fresh start to
tackling the crisis.
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