International

In addition to the eurocrisis, we now have the dollar crisis. No wonder that increasing numbers of people are afraid of what’s round the corner. Under such circumstances you should be able to expect decisive leadership and clear choices over Europe’s future. We are now, however, at a crisis point. During the extraordinary summit on 21st July, government leaders must make it clear that they will not transfer any further powers and that that they will opt for a partial annulment of the Greek debt. Otherwise the eurocrisis will without doubt lead to further steps in the direction of a European superstate.

In order to combat the eurocrisis, clear signals are needed from government leaders and Ministers of Finance. Yet to date all we have had is continual muddling through. That’s what you see so often in Europe: step by step, and always with the argument that ‘there is no alternative’, before you know it we have handed over our economic and social policy-making to Brussels, which will henceforth decide the broad lines of our budget. There’s an obvious solution to the problems of Greece, and that’s the annulment of part of the country’s debt, or restructuring for short.
For Europhiles this is a horror scenario. Restructuring means, after all, that we have been forced to acknowledge that the Stability Pact hasn’t worked, as it proceeds principally from the basis that member states keep their household accounts in order and repay their debts in a proper fashion. It would, moreover, put an end to a situation in which Greece is effectively governed from Brussels. As things stand the European Commission decides what measures the Greek government must take. Who would ever have thought that things would go so far? The same goes, by the way, for Portugal and Ireland – these countries too are in receivership and have to a great extent lost their sovereignty.

The way in which this has been tackled up to now has taken us rapidly in the direction of a superstate. The countries which have received aid are ruled in large part by an unelected European Commission, while the rest have submitted voluntarily to a European economic governance which could also lead to intervention by Brussels.
What the Europhiles didn’t realise is that the measures taken to date would prove inadequate. The financial markets are still uneasy and now Italy and Spain are coming under fire. So these same Europhiles are looking to take a great leap forward, with the introduction, for preference, of Eurobonds, which would mean that bonds would no longer be a matter for states but would be European issues. And that would mean still less would be left of national sovereignty.

It’s good that government leaders are meeting this week. We need to look at their conclusions with a critical eye. Will they continue along the path of additional loans to Greece, with no restructuring of the debt, or will they open the door to Eurobonds, in which case we will know that the Europhiles have won the day. In that case the member states who have kept things in good order, such as Germany and the Netherlands, will be sticking their necks more firmly in the hangman’s noose. If the government leaders acknowledge that Greece can never repay its debts and that further loans would make no sense at all, and thus opt for restructuring, then they will be recognising at the same time that there are limits to European interference. Greece can then catch its breath and consider its future, inside or outside the Eurozone. The extraordinary summit, in the middle of the holiday period, would then be of real importance.