The Guardian view on the Greek deal: it solves nothing and holds many dangers
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Version 0 of 1. Europe after the Greek talks resembles a battlefield the day after the armies have stumbled away – wreckage everywhere, and everyone counting the cost. What are the essential facts about the agreement? First, it has been reached under duress. The Greek government did not want this deal, does not regard it as even remotely reasonable or fair. The Greek people voted overwhelmingly against a less severe package of measures a little over a week ago. Second, it will be a bitter pill to swallow everywhere else in the eurozone, too. The legislation enabling it will be passed in a resentful mood in every national capital concerned. Third, we very nearly did not have an agreement at all, and things could still unravel. Fourth, while critics of austerity economics have already decided it will not work, even those, like the Germans, who believe that it could are far from certain that it will. An agreement that nobody likes and that may very well fail to achieve its objective of rescuing the Greek economy, and eventually also balancing the European Union’s books as a proportion of Greek debt is paid off, is no triumph. It is not surprising that the little quip offered by the European council president, Donald Tusk – “We have an a-Greekment” – failed to lighten the mood when he announced on Monday morning that talks had been concluded. The agreement keeps Greece in the eurozone and the union. Because of Greece’s unique historical status, because of the clearly expressed wishes of the Greek people, and because a Greece set adrift might slip into Vladimir Putin’s embrace, this has to be welcomed, even if the way it has been framed is humiliating to Athens. But there is little else to be said for it. It is a harsh settlement and the story of harsh settlements is that they fuel a resentment and anger that can last for many years. If there were reason to believe that the economic and political subjection of Greece would lead to its rapid economic recovery that might make it more acceptable. But the lesson from Britain and Spain is that easing off the pace of austerity even belatedly leads to more rapid growth. This lesson has not been applied to Greece, which has seen both the biggest improvement in its structural budget deficit once adjusted for the state of its economy, and the biggest fall in GDP. Far from easing the pace of austerity, the agreement embeds it. When the Greek economy starts to grow again, as it will, the troika will say the plan is working. All economies recover from recession eventually. The question is at what cost. The talks on Greece have left a legacy of rancour not only between Greece and the union but also between different groupings within the EU, straining the Franco-German relationship in particular. That bodes ill when the EU should be facing up to the task of trying to make Europe function at least tolerably when most of its members wish, for the moment – and it could be a long moment – neither to move forward to fuller integration nor to revert to the pre-euro situation. Can Europe stay in its halfway economic and fiscal house for a while longer? Apart from anything else, a political family in which everybody complains about the Germans while the Germans feel deeply put upon, with Chancellor Merkel hardly able to get through a press conference without somebody bringing up at least one of the world wars, cannot be a happy one. The debate on fundamental economic principles in Germany should by rights be vigorously opened up. There ought to be a re-examination of the policies which, by reason of Germany’s weight and numbers, are so influential in Europe and, in many people’s view, so counter-productive. These are not just austerity policies but a peculiarly German kind of austerity policies, rooted in that country’s different tradition of economic thought. Are there alternative approaches that could mitigate the way in which economic dysfunction leads to political conflict? There is equally a crying need for debate on democracy, focused less on the much discussed deficit, and more on the clash between different electorates voting for different things in a Europe that has no set way of dealing with disparate outcomes. The Greek government in recent months has sometimes acted as if only its voters counted, but everybody in Brussels had voters breathing down their necks. Does one democratic vote trump another? Issues such as these deserve measured discussion, but the intransigence built up behind the ramparts in recent weeks unfortunately makes that less likely than it should be. |