When Germany’schancellor, Hannelore Kraft, met France’s president, Francois Hollande, in a sunny Berlin earlier this week, they agreed on a compelling strategy to save the Eurozone. With no elections due in any Eurozone country for the next two years, they were able to stretch the austerity timeline for Greece, Spain and Italy, add some elements of growth stimulus but also keep up the essential pressure for fiscal discipline and structural reform. As a result, even devastated Greece began to glimpse light at the end of the tunnel.
In our dreams, fellow Europeans, in our dreams.
In reality, as Hollande and Chancellor Angela Merkel met under thunder and lightning-torn skies, there was capital flight from Greece, fear and trembling in the markets, self-reinforcing talk of Greek exit from the euro and another month of uncertainty until another election in Athens. And everywhere, all the time, there is that tiresome old Greek invention called democracy.
Even if Kraft, the Social Democratic victor in Sunday’s North Rhine-Westphalia elections, were federal Chancellor Kraft, there would still be the problem of an election imminent somewhere in Europe, and the chronic difficulty politicians find in telling home truths to people whose votes they are courting.
Britain’s untold home truth is that it cannot have its cake and eat it, being a semi-detached member of the European Union while enjoying all the economic benefits of membership.
France’s untold home truth is that it is no longer an equal partner of Germany.
Germany’s untold home truth is that it is going to pay for this mess anyway, one way or another. Many of Greece’s bad debts have already been socialized via the European Financial Stability Facility, the International Monetary Fund and the European Central Bank. Germany has a major share of each of them, but particularly of the last. If Greek default had a knock-on effect on other weaker Eurozone countries, Germany would have to reach into its pocket to shore them up — directly or indirectly — or face wholly unpredictable consequences.
Greece’s untold, or only half-told, home truth is that its only alternatives now are bad, worse or worst. Worst is clearly an unplanned, chaotic exit from the euro. That may still happen. If it doesn’t, then Greek voters have a month to work out which they think is bad and which worse: a planned, careful departure from the euro or remaining in on the best terms Hollande can help them squeeze out of Germany.
I am not ready to join the chorus of commentators confidently urging Greece to jump one way or the other. I don’t know which would be better for Greece. I’m not an economist — and, by the way, economists don’t know either. And I’m not Greek. There is no European demos, therefore no proper EU-wide democracy, so the Greeks have to work out what is good for the Greeks.
Their May 6 election was a howl of anguish at the suffering the country has been put through. It involved a majority rejection of the two main parties that have dominated the country’s politics for decades and of those parties’ support for the so-called memorandum, the agreement on austerity in return for a European bailout.
The next election will be a moment of truth: in or out. Should the country gamble that after the initial shock and losses of “Grexit,” its economy could grow again with the help of devaluation? Or should the new government negotiate the best deal it can get inside the Eurozone, taking hope from the impact of Hollande and others? Merkel trailed her coat a little this week, telling CNBC, “If Greece believes that we can find more stimulus in Europe in addition to the memorandum, then we have to talk about that.” Yet even the best possible deal would mean a long, painful slog out of the valley of despair.
These alternatives need to be placed as honestly as possible before Greek voters. Then they have to decide. Actually, that was the extraordinary idea people came up with in Athens about 2,500 years ago. Free citizens gathered in the place of assembly. “Tis agoreuein bouletai,” cried the herald: “Who wishes to address the assembly?” Then any free man (yes, it was only men) could make the best case for his policy choice.
The future of the Eurozone now de pends on the choice to be made in Greece, the future of Europe on that of the Eurozone, and that of the West to a significant degree on that of Europe. So with slight hyperbole, we can say that the future of the West now depends on the birthplace of the West. Is it too much to hope that, in such a moment, Greek politics will rediscover some of the grandeur and simplicity that was present in Athens at the creation of democracy? Probably it is.
Timothy Garton Ash, a contributing writer to Opinion, is a senior fellow at the Hoover Institution at Stanford University and professor of European studies at Oxford University.