As a keen observer of the events that have unfolded in Europe over the past few years, it is becoming clearer by the day that the “European Dream” has been turning into a bit of a nightmare. Sure, I know that the EU politicians are constantly reassuring us that they are addressing all of the issues that are causing the problems. And maybe some changes may even occur.
However, it is my humble opinion that all Europeans should be taking careful note of what has happened in Greece over, lets say, the past 12 months. For the real nit-pickers, who want to go back even further to analyse the Greece crisis, fine, no problem. But you will find, I think, that it will not make much difference to the conclusions that will be reached.
Why do I say this?
Firstly, you have all heard of “Game Theory” by now. Well, I want to talk briefly about “Scientific Modelling“. In science, a model is a representation of an idea, an object or even a process or a system that is used to describe and explain phenomena that cannot be experienced directly. Models are a way of linking theory with experiment, and they guide research by being simplified representations of an imagined reality that enable predictions to be developed and tested by experiment. So a model is the representation of something real that allows a researcher to study the effects of changes on a set of parameters.
I wish to suggest that Greece has become a model of Europe. Yes, yes, I know that many of you are going to immediately rush to comment that this is total nonsense, that Greece is nothing like Europe. But just wait a moment and reflect on this concept.
a) Greece has a political system and a working democracy, exactly like other EU countries. Tick…yes.
b) The Greek economy operates (or rather, used to operate) within the same parameters, limitations, constraints and with the same currency, with the same ECB rules and regulations, in fact, with the same monetary & fiscal systems exactly like all the other Eurozone countries. Tick….yes.
c) The Greek people are the same as the rest of their European neighbours…..oh no, sorry, scrub that. They are lazy, corrupt, don’t want to pay their taxes……Wait! No! Lets really be honest. Maybe a few are not model citizens, but that’s just the same as in the rest of Europe, more or less. Some country’s citizens are really good and some are not so good. They are just ordinary people, doing the things that people do. Just trying to get by in a system that is not often kind to the ordinary man or woman in the street. So, let’s be generous and give a tick…..yes.
d) Greece is blessed with a wonderful infrastructure and plenty of resources like many of the other EU countries. Well, not really. They have what they have and they try to do the best with what they have got. This is a tricky one. In the grand scheme of things regarding the natural wealth of the country, whether we like it or not, Greece unfortunately ranks near the bottom of the list in the EU. But this sort of disadvantage, if known, can be taken into account in our modelling exercise.
There are many more factors to be considered. These are but a few examples, from the easy ones to the more difficult.
So what does all of this mean? It means that, if Greece is in the EU and Greece is in the Eurozone, then what happens in Greece is a microcosm of what happens in the EU/Eurozone. Or rather, I should say, what WILL happen in EU/Eurozone. Like a scientific model.
Lets take democracy or the democratic process, to be more precise.
It would not be wrong to say that the European Union prides itself on having modern and progressive democratic processes. And everyone wants to get into our club. Whilst the EU/Eurozone surged ahead with economic development, up to about 2008, the average EU citizen felt pretty comfortable with the status quo. Since then, however, things are not quite so rosy anymore. And with disgruntlement, comes the demand for change and change in our club comes through the democratic process.
Let’s take Greece, for example (our “model”).
Things eventually got so bad in Greece that the people revolted….through the ballot box!
Today, as we reflect on the events of the past six months, much of the euphoria has waned and the people are disillusioned. What sort of democracy is this, they ask? We will have to see what the future brings.
However, and this is the point of this post (finally), how does this democratic process really get galvanised? What suddenly causes the true democratic spirit to awaken? When and why do people eventually say, “enough is enough, we want something different”?
I can give you no better answer to these questions than what I read in the blog of Pavlos Papageorgiou.
This is what he had to say:
I’m in Greece, partly so I can vote in the upcoming Greek elections where the leftist euro-reform party SYRIZA is expected to win. SYRIZA would probably win without me, but I felt it was important to come and vote for this important event. From the tone of the media inside or outside Greece you get the impression that a SYRIZA victory represents some kind of Euro disaster. On the contrary, I feel a SYRIZA government in Greece (or another one like it in Spain or Italy, this is about policy not people) is a bold step towards the solution. I regard it with optimism, even jubilation. Let me tell you why.
Disclaimer: I’m close to some SYRIZA candidates, policy thinkers, or MPs so I may be biased.
First why am I voting in Greece? I don’t live there. It would make more sense for me to vote in the UK where I live and pay taxes, but I don’t get the privilege. I guess native Britons are afraid I might vote for someone worse than David Cameron. Our concept of EU citizenship is still half-baked compared to America so we vote for national elections in our country of origin. We’ll fix it, but until then we have EasyJet democracy. In any case, I don’t feel strongly about voting on Greek affairs. I feel it’s important to vote, via Greece since that’s where I have a vote, for changes in Europe.
At a basic level I feel a duty to avert a bad outcome and push for a good one. If you recall, two elections ago the extreme right scored well in parliamentary elections in Greece. A surprising result that showed rising intolerance, fear, and naive insularity in Greek society. I find it abhorrent. At the same time you saw the Front National in France and Britain’s UKIP, which I see as equally negative but better at hiding behind a veil of respectability, gaining ground. SYRIZA is the polar opposite of these parties. In a climate of extreme right-wing euroskepticism, I feel it’s imperative to vote for leftist euro reform in Greece, Spain, or elsewhere. So that’s a defensive reason to turn up and vote.
The other reason, and the main one, is I don’t want an EU president and finance minister elected only by Germans, running the EU in a way that only suits Germany. Ms Merkel is our de-facto EU president. It’s clearly not Mr Hollande or Mr Juncker. Mr Schäuble is Europe’s finance minister. Whether German citizens like it or not, these officers set policy for the Eurozone, not just for Germany. They run the Eurozone in a way that serves the interests of narrow or short-sighted mostly German capital while driving real economies especially in the south into depression. This is wrong, and we need to use the democratic process to change it. Because of institutional inertia we non-Germans can’t vote for the Eurozone’s de-facto president and finance minister. Eventually these will be elected EU-wide but now, urgently, we must force our German-elected EU leaders to change their policies.
The way to do this is for the governments of peripheral countries to confront Ms Merkel and Mr Schäuble with the failure of their policies. This is what SYRIZA intends to do. It’s not an anti-Europe or anti-Euro party but it has to say, realistically, that current EU policy towards the periphery is not working. Greece’s economy is in depression and it’s debt is unsustainable, as it has been since 2010. Debt restructuring and expansionary monetary policy are needed to end the crisis. A growing consensus of economists agree, so we witness establishment papers like the FT urging the same policies that SYRIZA favors, for pragmatic economic reasons.
What will happen if SYRIZA is elected and starts renegotiating debt and austerity measures with Berlin? I think mainly compromise. EU institutions will have to accept balance sheet losses, which can easily be covered by monetary expansion. Greece will have to live within its means day to day, which given the big drop in incomes since 2010 is now possible. SYRIZA is new so it can enact better tax policy, touching previously untouchable classes, and in return can reasonably ask the EU for welfare assistance towards the poorest citizens. On election night the markets will jitter and possibly overreact, but forcing a Grexit is in nobody’s interest. In the long run markets agree with SYRIZA’s program and EU-wide policies such as quantitative easing that it aligns with.
A win for SYRIZA will be an important event for Europe, not because Greece is important but because some peripheral country needs to stand up for a change in EU policy. It could be Spain or Ireland, but looks like it’ll be Greece. Far from that being a disaster or some new chapter in the Euro crisis, I think it’ll be a triumph of the democratic process and post-crisis Europe’s finest hour.”