Greece is a small economy and thus does not stand among ten most powerful eurozone countries. This country makes only 2.5 percent of EU`s Gross Domestic Income, based mostly on service sector in tourism. It is now clear that the accession of Greece to the EU and the eurozone was motivated by political and not economically justifiable means, which is why Europe and Greece are now paying the price of these decisions.
However, the current crisis has demonstrated relatively quick and unanimous reaction when it comes to EU`s existence, and that is something most Euroenthusiasts could not even imagine. As soon as "Greek crisis" began threatening Italy, Spain, Portugal, Ireland, and further Germany, Great Britain and France, heavy bureaucratic apparatus has proved its` ability to react immediately. It mostly depends on political will than on institutional bureaucratic procedures. Otherwise, there would be no "Greek crisis."
Our eyes are now upon Berlin and Paris. Being the EU leaders, the destiny of the entire alliance is in their hands, including the destiny of Greece and other small member countries still hoping that EU might turn on the blind eye. Greece, however, will probably be spared of harsh criticism, since the official financial records in France or Germany have also suffered some changes so as to make inner and external balances better than they indeed are, which is why authorities in Berlin and Paris have realised that, instead of pointing finger at the culprit, a solution has to be found. And it seems that it has. Its` effectiveness, on the other hand, is still unknown.
"The eurozone and its` currency - Euro - are desperate for substantial reforms, for the system is ineffective, and if something lacks effectiveness, you can either reform it, or throw in a waste basket," the economist and a Nobel Prize recipient Joseph Stiglitz says.
German daily Bild reports that most of people in Germany, particularly political and economic leadership of this country, have embraced euro, which is used all over the European Union, as their previous currency Deutsch mark. That is why they expect other EU countries to be equally responsible regarding their common currency. The approach was too idealistic, for if so, Spanish peso would be worth like Deutsch mark, or Greek drachma would equal Danish Krone.
Although insisting on maintaining European Union`s stability, German people believe that Deutsch mark should be returned in use, which would de facto and de jure initialise the beginning of the eurozone`s break-up. These are the result of the latest polls, but amenable experts seem to be more careful in their claims.
"As regards Germany, returning to national currency and abandoning eurozone would be an expensive and everlasting process, but the break-up of the eurozone would also seriously affect EU`s future", Dr Karin Hahn, from Berlin Institute for Economic Research, explains.
But when it comes to elite, euro replacement is not in focus. At least for now.
The so-called "Wolf package" (financial aid for Greece) represents a litmus test for the eurozone`s survival, which has now demonstrated all weaknesses in this critical situation. Wolfgang Schauble, German Minister of Treasury, has put a plan consisting of 12 points which establishes a special regulatory body for the purposes of monitoring EU members` indebtedness on foreign markets, as well as controlling suspicious finances in governmental business`, which is exactly what happened in (and not only in) Greece.
This kind of institution is intended as supranational body at EU level. It basically corresponds with George Soros` attitude, who has already, being the Open Society Fund`s president, stressed that "a common market requires a common currency. But common currency also requires a common fiscal policy." It practically means that Europe needs a common Ministry of Treasury if these problems are intended to be surpassed, for the circumstance in which the European Central Bank conducts monetary policy, while each eurozone country has kept national fiscal policies, has appeared as unsustainable.
Even the United States of America believe that the EU is too much divided and thus inefficient enough. Despite the Lisbon Treaty, it`s massive, inert and inactive bureaucracy is what strangles its efficiency. Is fiscal union possible? Is it what Jacques Delors, former president of the European Commission, has promoted when succeeded in introducing monetary union to the Maastricht Treaty in 1992?
It is still unknown whether monetary, fiscal and customs union is possible without the strong political one, and that fact also reassesses EU`s future.
In any case, in order to make sure that the "operation Greece" has succeeded, the patient needs to survive, and the European Central Bank experts` believe that it won`t be possible before the second half of 2012.
The situation within the European Union reflects significantly on the region of Western Balkan. While Serbian officials share cautious optimism, saying that the integrations will not be interrupted yet slowed down, there are some who believe that Europe is tired of continuing enlargement further countries which are not fully qualified for joining the club.
Sonja Licht, president of Foreign Policy Council at the Ministry for Foreign Affairs, says that Serbia`s integration is expected to be "slower, but more thorough," for Serbian officials will not allow their country to adjoin the EU unprepared. The cause of Greek crisis does not lie neither in recession nor in Wall Street collapse, but in the fact that this European country has not fulfilled all economic conditions for EU membership.
New compromises will most certainly lack this time.
* CEV Magazine is an online publication of the Centre for European Values. (Photo: European Parliament, 2010)
