Belmont Club

All Greek To Them

Daniel Hannan, the Conservative MEP for Southeast England, argues that the Greek showdown with the EU on the issue of whether to hold a referendum on the bailout underscores the determination of Brussels to overrule its member’s internal processes.

Shall I tell you the truly terrifying thing about the EU? It’s not the absence of democracy in Brussels, or the ease with which Eurocrats swat aside referendum results. It’s the way in which the internal democracy of the member states is subverted in order to sustain the requirements of membership.

On Monday afternoon, Papandreou announced a referendum on whether to accept the EU’s bail-out terms. … I wish I could convey the sheer horror that his proposal provoked in Brussels. The first rule of the Eurocracy is “no referendums”. Brussels functionaries believe that their work is too important to be subject to the prejudices of hoi polloi (for once, the Greek phrase seems apposite). Referendums are always seen as irresponsible; but, at a time when the euro is teetering on the brink, Papandreou’s proposal was seen as an act of ingratitude bordering on treason.

The Greek crisis has cast a dark shadow even over the sunlit pleasances of the Côte d’Azur, as the NYT reports.

The Group of 20 summit meeting in Cannes was supposed to be a chance for Europe and the event’s host, President Nicolas Sarkozy of France, to shine. Instead, the two-day meeting is coming at an extraordinarily dark time for the Continent, with Europe in political disarray, its economy tipping into recession and the future of the euro zone in doubt.

The mighty have fallen, perhaps not from so great a height as they imagined, but to lower than they could have thought. How did a country as inconsequential and weak as Greece create this situation? Not from its own magnitude but because there was gunpowder heaped in every corner of the European Union. The power of Greece was the power of a little spark or sputtering fuse in an explosive magazine. That gunpowder consists of the determination of the Eurocrats to maintain the edifice they have constructed at any price, as Hannan argues.

Eurocrats are prepared to pay any price rather than admit that the single currency was a mistake – or, more precisely, to expect their peoples to pay, since EU officials are exempt from national taxation. The peripheral countries are to suffer poverty, unemployment and emigration, the core countries perpetual tax rises, so that supporters of the euro can save face.

There is no “give” so the rapidly expanding crisis must be contained within the rigidities of Brussels. The Europeans played at a game they could not win and one they they could not afford to lose. That means they are behind the 8-ball.

Reuters reports that Papandreou has been “summoned” to Brussels “for crisis talks in Cannes, before a G20 summit of major world economies, to push for rapid implementation of measures to tackle the euro zone debt crisis, which Athens has thrown into doubt.” The AP says that Plan A must succeed, because there is no — and there has never been — a Plan B.

Facing the danger that the whole plan’s edifice may crumble, European leaders could opt to take the hard line and push for the Greek referendum to be canceled.

Some European officials are already playing hardball, suggesting Greece’s rescue loans could be held up until the referendum is complete. Without those loans, Greece would be unable to pay pensions and salaries in two weeks and would default in December.

But starving Greece of money and telling Greeks they ought not to have a voice in decisions that would affect their country for years would likely backfire. It would not only damage the eurozone’s commitment to democratic decision-making, but would also play into the image of the European Union as aloof from the concerns of ordinary people. That might well increase the chances that the referendum would fail.

None of this was secret. Even on the parliament floor of Brussels it was always clear that insofar as the EU was concerned, it was victory or bust. Now that that things have come to the sticking point the EU must find a way to remove the Greek referendum obstacle. Or it will be bust. Nigel Farage gave this speech in June, 2011, reminding them they had no way to win. The market, Greek fecklessness and their own stupidity was combining in a witches’ brew to blow everything sky-high.

The Eurocrats are doing their level best to blow upon the fuse in the hopes of snuffing it out. What odds would you give them?

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