International

Last Wednesday Finance Minister Jeroen Dijsselbloem, who also chairs the Eurogroup, expressed concerns over the gap between the broad social discussion of the euro and what is really happening in Brussels. In his own words, ‘If we politicians can’t manage to formulate an answer, then I think things are looking bleak.’ What he is thinking of in saying this is the need to improve communication and strengthen democracy. The core of the problem does not, however, lie there. If the gap between politicians and the public has to be closed, then we should be having a fundamental discussion about the euro, and politicians must admit that to date the eurocrisis has been addressed via half-measures which have only served to inflame anti-European feelings north and south.

At the moment Cyprus is demonstrating how things work. The heads of government, with their finance ministers in tow, are hoping that the island nation can be controlled. The whole discussion surrounds the question of whether Cyprus can rustle up the €7 billion remaining to be found if the banking sector is to be restructured. Cypriots themselves, however, express the view that as a result of the collapse of their economy some €30 billion will probably be needed in the near future if the state debt is to be reduced to a manageable level, one below 100% of GDP. As for additional rescue packages, the finance ministers are saying not a word. Only in the most extreme case will they receive additional support, just as was the case in Greece.

A recent report on Dutch television revealed where these halfhearted policies lead. As a Cypriot fisherman put it, ‘look, we would have been poor whatever, but without the euro and without a banking sector that’s run entirely out of control, it would have been our own poverty.’ Ever more people are asking themselves therefore whether in the next ten years the agony within the euro will be more bearable than would be the agony outside the euro. The euro-tap will run and run, but only until the pipes burst.

In the whole of Europe support for the EU is in steep decline. Last September the EU survey agency Eurobarometer published the results of a new enquiry which showed that compared to a year earlier the number of people who only identified themselves with their nation state and not with Europe had increased from 39% to 44%. This isn’t only because of growing Euroscepticism in the Mediterranean. For the people of the wealthier Eurozone countries, the same thing goes: people aren’t crazy; they know that the eurocrisis is far from over and that every day yet another of these countries could come begging for financial support. I would single out Slovenia and Italy, but even France isn’t in a stable position.

A real solution demands that the debts of the weaker Eurozone countries be annulled. The SP has been calling for this for years, but governments are opposed because the consequences for financial institutions in the wealthier countries would be enormous, with yet more banks being menaced by bankruptcy. It is for this reason that the heads of government adopt half-hearted solutions which give the weaker countries just enough air to carry on breathing. There is, however, an enormous social price to be paid, in sky-high unemployment, and poverty which grows by the day. Not only does this spread Euroscepticism, it is leading to the rise of new fascist groups. It is not at all clear how long this can continue. A disorganised disintegration of the Eurozone would be the worst possible outcome, but persisting with half-hearted solutions is also extremely dangerous. The euro-tap will run and run, but only until the pipes burst. It’s only a question of waiting to see where that will happen first.