Column euroschau: greece is racing towards the abyss

The Tsipras government has no sense of pragmatic politics. Greece expects further billions in aid without doing much to solve the crisis. The fate of the euro hangs by a thread. All of Europe is threatened with disintegration.

By Klaus-Rainer Jackisch, HR

It was a night and fog action, but it did not remain a secret: Late on Monday evening, Chancellor Angela Merkel hosted French President François Hollande and EU Commission President Jean-Claude Juncker in Berlin. Then the limousines of ECB boss Mario Draghi and IMF boss Christine Lagarde also drove up. The top meeting was about the future of Greece. Apparently, Athens became submitted one final offer.

Tsipras cabinet like an amateur play troupe

These days the hour is striking for Greece. Only in Athens is it difficult to understand this. The country has its back to the wall and barely has a cent left in the public coffers. It received billions in loans from the other euro members, but did little to help overcome the crisis. Nevertheless, Athens takes it for granted that the donors keep pouring in.

D.he government gives the impression of an amateur play troupe: mostly nice, friendly scientists who achieve excellent results in their field and with whom one can have wonderful theoretical debates. But they are not good for ruling. Athens’ top rulers have no sense of how to implement politics pragmatically. No wonder that the donors European Union, European Central Bank and International Monetary Fund jump in the triangle. Prime Minister Alexis Tsipras now seems to be slowly realizing how much his country is heading for the abyss. Allegedly he has the reform list that has been promised for months presented now.

Greece is on the ECB drip

The ECB has been looking at developments for a long time with great concern, but also with massive annoyance. Everyone around Draghi is aware that Athens is now only dependent on the ECB. It authorized the Greek National Bank to issue emergency loans. This will keep the Greek commercial banks afloat. Actually, the ECB is only allowed to do so if the banks concerned are creditworthy. It is an open secret that there are great doubts about this. That is why the ECB threatened weeks ago that it would end the emergency loans if Greece does not move. Little has happened so far.

The Greek tragedy is not just about Greece. The collapse of the country and a possible "Grexit" of the run-down country would have fatal consequences for the euro area and for the entire European Union.

British efforts to leave the EU

In any case, she is facing an acid test of unimagined proportions. Because the efforts in Great Britain to leave the EU are growing. Years ago it would have been unthinkable that London would turn its back on the EU. There has always been a great din among the conservatives. But so far, a large majority of the population and the economy have always supported EU membership. However, the irresponsible actions of Prime Minister David Cameron of the Tories for domestic political reasons and the populist behavior of the anti-European party UKIP have turned the mood.

Great Britain itself is facing a split: After the brilliant victory of the Scottish nationalists SNP in the general election, the new boss Nicola Sturgeon will certainly soon initiate a new referendum on Scottish independence. The result is almost certain: Scotland will almost certainly leave the union with England, Wales and Northern Ireland. There are also ideas for independence in Wales. So far, they have only failed because of the empty coffers in Cardiff, which were generously subsidized by the EU. This development is devastating for Great Britain. For Europe too.

Worry about forced departure from Ireland

As if that weren’t bad enough, Ireland is now worrying too. The country has extremely close economic ties with Great Britain. Both countries joined the then European Community in 1973. In Dublin there is an open debate about this: a UK exit from the EU could force Ireland to also say goodbye to Europe. This would also have fatal consequences. Because that would seal Ireland’s exit from the euro area. The debate about one possible exit from the EU is therefore also a direct threat to the euro!

Movements critical of Europe are also gaining popularity in Spain, which is actually so Europe-friendly. The success of the PODEMOS party in the local elections clearly demonstrated this. In Catalonia, Andalusia and the Basque Country, people have long preferred to rule themselves rather than being patronized by Madrid.

What a terrible development: all over Europe people believe that they will find their salvation in independence, in selfish positions and in a return to small states. The failure of the politicians to solve the euro crisis and the actions of the ECB, which is not democratically legitimized in this context, have made the population angry with the euro and with the entire EU. Europe’s leaders have failed to bring Europe’s citizens closer to the benefits of a united Europe.

Europe is threatened with disintegration

Now Europe is threatened with disintegration. A collapse of the EU and the monetary union would catapult the continent back into the instability, unrest and unpredictability that sparked two world wars. Economically, Europe would fall sharply behind. Aggressive states in Asia such as China are just waiting for this opportunity.

In view of this situation, Europe needs something completely different: not less, but significantly more integration. Politicians have to take the next step: Europe can only work if the monetary union works. That only works with a fiscal union. That means the transfer of further sovereignty to Brussels. It also means a transfer of funds from the rich to the poor countries. A currency union can only be successful if there are similar economic conditions everywhere. This truism has been violated for more than 15 years.

So the euro must finally be put on a solid footing. That was also the clear mood of all those involved at an ECB forum in Sintra, Portugal a few days ago. Around 150 top-class scientists and central bankers from all over the world debated the future of the Eurosystem. Stanley Fischer, Vice President of the US Federal Reserve, put it in a nutshell: If Europe does not create prosperity for its citizens, the euro project will fail.

We now need the big hit: more integration instead of less. And we need politicians who say this openly and honestly. Those who have the courage to pour pure wine to the citizens that this step will cost a lot of money. But it will be much, much cheaper for everyone than if the euro and the EU collapse.