Opinion: Has the EU just come of age?

It sounds a daft question, given the number of articles critical of the solution to the Greece crisis which have been appearing in my Facebook and Twitter feeds, but things are not always what they seem. Looking at unconscious processes in organisations, the things that people act out without naming tend to be the really important ones

My sense is that we might just have tipped into the space where the EU functions like a truly federal entity — albeit with a deep faith in subsidiarity — and the griping is the griping one has when a government makes a difficult decision, not when it is seen as illigitimate.

What first sent my mind in this direction was the Greek referendum. Far from being an “in/out” referendum, this was one that assumed Greece was inevitably part of the EU, woven in so tightly that this bizarre stunt could not cause them to leave. The “no” vote was strong, but so was the desire to remain in the Eurozone and the EU. For Alexis Tsipras to have made such a fuss about democracy, and then ignore the referendum could seem bizarre, but it makes more sense if I compare it with the antics of a 1970s-style shop steward garnering the support of the workers as a negotiating tactic, or the rebellions of Liverpool City Council at the height of the Militant Tendency. In both cases, quite extreme behaviour is possible because people assume an underlying unity — the shop steward does not want their members to lose their jobs, and Liverpool was not going to cease to be part of the UK. As with Greece in the EU, the strong behaviour is possible because they feel they belong.

The angry comments in my Facebook and Twitter feeds have also been fascinating. One went: “Could someone slip a note to the European leaders about the scale of anger and disbelief building up across the continent? #ThisIsACoup”. This is feeling like anger towards a government as if “the European leaders” have become “the government”.

And is it a coup? Not really. Some of the changes Greece is now required to enable are market liberalisation change which have been promised for ages. They make sense both for the Greek economy itself, but also in the same way that all harmonisations of the Single Market were there to develop the economies of the whole of Europe.

The tight timetable for new legislation ahead of money becoming available has been read as a foreign takeover of Greece, but given that the Syriza government has managed to destroy the growth that was happening when they came to power and lead Greece back into recession, this could equally be read as reality re-asserting itself.

In psychoanalytic terms, a reckless anti-austerity programme makes total sense as a withdrawal from reality into a fantasy world. Although they are at opposite ends of the political spectrum, both UKIP and the Greens strike me as something similar in the UK. There is a parallel with someone regressing to early childhood, where there are parents who can contain their fantasies to limit the possible damage. For parties with no chance of being involved in government, that “parental” role is taken by society itself in not electing them. For Syriza in Greece, it has been possible to push some extreme positions because the EU has taken on that parental role.

In the recent crisis, the EU has stepped into functioning as a federal state, dealing with a recalcitrant region. It is no coincidence that Angela Merkel has been so prominent: she is Chancellor of the most successfully federal nation in the EU, and well used to brokering compromises between regional and national governments.

I suspect we have just seen a really important turning point, when the EU starts to be treated as a federal government. David Cameron’s referendum is a side-show — another regression made possible because a “no” vote is unlikely. The task for us as Europeans will be to continue the discussion and engage meaningfully in the next European elections, stepping up to our role as citizens in a federal Europe.

* Mark Argent was the Liberal Democrat candidate in Huntingdon Constituency in 2019 and blogs at markargent.com/blog.

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This entry was posted in Europe / International and Op-eds.


  • Eddie Sammon 15th Jul '15 - 4:54pm

    Good topic to debate. I agree with the “parental role” analogy that electorates act more like a pressure group when they are part of a bigger federal entity. I often think if Scottish independence happened then the SNP would suddenly become a bit more pro business.

    However I don’t agree that the deal is good for Greece or this marks the start of a federal Europe. My opinion is that the Euro is finished and as Paul Mason suggested: Germany has come close to “mentally leaving the Eurozone”.

    I think the Lib Dems should run an anti-Euro, but pro EU campaign. The UK could set an example for the rest of Europe. The EU should be about free trade and free travel, not a single currency and political entity, yet.

  • Tsar Nicholas 15th Jul '15 - 5:07pm

    I wholeheartedly agree with Eddie Sammon’s second paragraph. I also think that even ordinary people have noticed the EU on this issue and it may negatively affect the way they vote in the upcoming referendum.

  • Mick Taylor 15th Jul '15 - 5:37pm

    Eddie, Eddie, will you never give up?
    People have been predicting the end of the Euro since it was first established, most notably right wing US economists who think the dollar is the only currency in the world. It will of course survive as long as the Euro Group of nations want it to, because failure – and a relaunch of long dead currencies – is an unthinkably expensive option.
    Also because it’s so damn convenient for trade and travel to be able to use the same currency wherever you go within the Eurozone. Sure there will always be ways to improve its operation , but it’s here to stay, so get used to it.
    The only people to benefit from countries not having the Euro are money exchange traders and foreign currency sellers!

  • Eddie Sammon 15th Jul '15 - 5:48pm

    Hi Mick, I’ve been a defender of the Euro until last week, but Germany and others want to run it like an automated machine, rather than a flexible democratic institution.

    The problem is not just the lack of desire for richer countries to help the poorer countries, but the difference in culture and economic philosophies.

    At the very least Greece will leave it, but I was astonished at what they ended up making Tsipras sign up to.

  • Samuel Griffiths 15th Jul '15 - 6:00pm

    Shame on those Greeks and left-wing parties for not bowing down to their market-liberal betters, eh? How dare they think about suffering people before they think about the great European economy! This might be the most distasteful article I have ever read on LibDem voice.

  • David Pollard 15th Jul '15 - 6:19pm

    The Eurozone countries have really cocked this up. Greece is such a small contributor to Eurozone GDP it is no problem to sort out their problems. The plan should have been to work out a programme which would reduce the Greek government deficit, but at the same time spend enough to start the Greek economy growing again. In fact, they should have been allowed to follow a plan similar to that followed by George Osborne and Danny Alexander. Once the economy is growing again then the debt could be rescheduled (Bloomberg News suggested 200 years)

  • paul barker 15th Jul '15 - 6:29pm

    This article makes a really convincing case, looking at the crisis in a new way. I dont think anyone is arguing that the whole process has been handled well, on either side but real Politics is often messy & inneficient. The parallel with Militant & Liverpool seems spot on.

  • jedibeeftrix 15th Jul '15 - 6:36pm

    “My sense is that we might just have tipped into the space where the EU functions like a truly federal entity — albeit with a deep faith in subsidiarity”

    Mark, an honest question: do you see Britain as being part of this truly federal entity, or, desire that it should be so at some point in the next decade?

  • Eddie:

    Why do you understand so many things back to front? Tsipras signed because he did not want or could not face leaving the Euro. Perhaps that ought to have been the subject of his strange referendum, but it was not, so he had no mandate to leave. The ECB actually overstepped its rules in continuing to maintain ELA, but again it had no mandate to increase its emergency provision of money. There was no democratic mandate that Germany, Slovenia, Solvakia, Estonia, France etc; the other Euro states should supply more credit. Many of these states are considerably poorer than Greece and have contributed a very significant portion of their GDP towards the Greek bail out.

    You may be more right about differences in culture, if by that you mean the cronyism and fiscal inefficiencies of Greece. But since the UK is a richer EU state, would you really support your money going to support that sort of culture? In fact the finance ministers have displayed extraordinary flexibility, so much so that many critics are saying that they should have been much more rigid long ago, forgetting, it would seem, how precarious the world financial systems were in 2009-2012, but even so Greek debts to the banks were cut by 50 – 75%. In return the EU states and others (including the UK and US through the IMF) picked up the tab. There has been enormous flexibility, however as Verhofstadt pointed out, the Greek side of the bargain was barely implemented, certainly not by Syriza, who managed to take Greece from a primary surplus back into recession.

    I have been impressed by Junker and Tusk, they have created a ‘can do’ approach to seemingly intractable problems. I think this article tacitly recognises their political skills and sense of vision for a forward moving EU

  • Eddie Sammon 15th Jul '15 - 7:04pm

    Interesting opening question Martin. Lol. Well In January I said everyone was too calm about the Greece situation and then a month ago I said the stock market was too high and then it all kicked off, so now I suppose I am being a bit less timid with my calls.

    Greece wants to stay in the Euro for now, but they have been temporarily humiliated Versailles style and they won’t put up with it as a lasting solution.

    Germany appears to no longer want the mediterranean countries in the Eurozone. They can probably cope with France, but the Front National and a pandering Republicains party are on the march over there.

  • “I suspect we have just seen a really important turning point, when the EU starts to be treated as a federal government.”

    And I suspect that if we have to sign up to “federal government” to remain a member of the EU, most UK citizens won’t want to remain within it.

  • @Mark Argent (and Martin)

    Do you think the IMF has “reverted to childhood” then??

    I must say I listened to Caroline Lucas on the Greek deal last night and thought “She is talking a lot of sense”

    The EU (ie. Germany) needs to bite the bullet and write off a significant amount of the Greek debt. If I was Tsipras I would be printing drachmas so that once there has been a temporary respite, I could leave the Euro and default on all of it (just like private companies going bankrupt, which is apparently not a problem…). After all, Putin will help Greece in return for some nice military bases…

    And while I am at it, the tender mercies of the western banks look likely to send Ukraine into fascism… Have we not learnt the lessons of the 20th century, where refusal to write off German debts after WW1 led directly to hyperinflation and the rise of Hitler? If the Tsipras government is considered “extreme” just wait!

  • Interestingly at the moment the IMF and the UK, two bodies that are most adamant that they are opposed to contributing more money, are the most vocal in calling for a further annulment of debt.

    It is obvious that comparisons to Versailles are gross hyperbole and but for Greece’s quixotic referendum would never have been made. In fact the interest rates are exceptionally low and may well be suspended for a period. In six months Syriza has trashed Greece’s faltering recovery, within another six months the economy can be put back on track.

    My doubts are that there is a mindset amongst privileged groups, the beneficiaries of clientelism, that may be very resistant to change.

  • Why did Germany enable Greece to spend over 6 percent of GDP on Defence – largely German hardware. Why are other European nations effectively bailing out German arms manufacturers?

  • jedibeeftrix 15th Jul '15 - 9:44pm

    what is old is new again; i remember people saying it was the start of a ‘bright’ new future.

    these people did too:


  • Richard Underhill 15th Jul '15 - 11:13pm

    A lot depends on the timing, whether the situation improves and, regrettably, how popular the governing party is on unrelated issues.

  • Graham Evans 15th Jul '15 - 11:24pm

    I was once in favour of some moves towards a federal European structure, but having seen how it could well function, I’m starting to have some sympathy with the Eurosceptic at an emotional level. I now tend to think that the UK remaining a member of the EU is simply a question of making the best of a bad job. Is it not time for the Party to abandon its voce approach to the shortcomings of the EU and spell out what changes we want to see made? While Cameron may get few substantive changes in his negotiations, if he can sell them to the British public and win a referendum, then it will be the Tories who get the benefit, no matter how much LDs do in campaigning for a YES vote.

  • @Graham: the sense of “making the best of a bad job” might be quite important. For our Westminster parliament, we are forever “making the best of a bad job” — though views of how the parliament should change will vary across the political system. The point is not that either the Westminster parliament or the EU are perfect, but that we run with them pragmatically and benefit by doing so. Part of my sense of the EU coming of age (perhaps) is that people seem to be arguing over the actions in the Greece crisis from a variety of perspectives, just as we do over the actions of our Westminster parliament, rather than treating the EU itself as an alien entity that is “good” or “bad”.

    As far as Cameron’s negotiations go, I wrote this during the election campaign: http://www.markargent.com/nwl2015tories_bury.htm — the key point is that the committee tasked with coming up with a shopping list of powers to seek to repatriate concluded that repartriating any of the ones the looked at is against the national interest. That rather suggests Cameron’s “renegotiation” is an exercise in smoke-and-mirrors to appease his right wing, rather than something that will change things.

  • The real problem is that Europe is, right now, governed according to the dictates of a reactionary neoliberalism. The question everybody who has a problem with that, Europhile or Eurosceptic, has to answer is: Is that an intrinsic characteristic of the European project, or is it an accidental flaw that, with some work, can be amended?

  • Graham Evans 16th Jul '15 - 7:40am

    @ Mark Argent While the article you quote does a hatchet job on Cameron’s negotiations, it has nothing positive to say about what reforms are necessary. Moreover, while LDs tend to mouth the mantra “reforms are needed but….” no one comes up with a set of radical proposals. The implication is that significant change is not possible and we therefore have to put up with tinkering round the edges. This is hardly an inspiring offer, not one to win people around to supporting Britain’s membership of the EU, much less encouraging anyone to vote LD. The question then is: “Is the EU capable of reform, or will it just trundle along with increasing numbers of the national electorates becoming more and more disillusioned?” At present the right wing parties which are most strident for change, such as UKIP and AfD, are handicapped by having other wacky policies, and by internal personal divisions, which put off large sections of the electorate. However, this could change and centre and centre left parties will then find themselves out in the cold because they have developed no alternative, inspiring, offer.

  • Has the EU come of age? We shall have to wait and see but this is a thoughtful piece with some perceptive insights. What most commentators on the Greek crisis have missed is the absolute commitment of the Greeks to stay within both the EU and the Eurozone. That speaks volumes for the future strength and coherence of both.

  • Roger Billins 16th Jul '15 - 11:15am

    This article is plainly wrong and its author underestimates the deep resentment to mainstream politics endemic in Europe at the moment evidenced by the growth of left and right wing parties in every country in the EU. The latest round of negotiations with Greece will have further alienated millions more. I joined the Liberal Party in 1974 because of its pro EEC internationalist approach butt I am having doubts about belonging to a Europe dominated by an aggressive, militant Germany.

  • “For Alexis Tsipras to have made such a fuss about democracy, and then ignore the referendum could seem bizarre…”
    Not if he had,.. as he said, ” a knife at his throat”,.. and is now forced to pass into Greek law, measures that he does not believe in?
    Yesterday the Greek parliamentarians, voted to send their sovereignty to Germany, in exchange for an 86 billion Euro ‘Wonga’ loan. So, far from coming of age, the EU is revealing its true colours. The EU delusion, was that somehow sovereign European nations could become a ‘federal family’. The implied notion was that all nations would be cooperative ‘team players’. That fallacy in now exposed. Germany is telling the whole of Europe that it is not a team player, and as long as it is writing the cheques, everyone must do as they are told.
    Greece is merely the first of many EU nations to wake up to the fact that they are to become a colony [not a federal nation], and that they can elect whoever they want, but actual policy from hereon,.. will be faxed from Germany.
    Is that the sovereignty and democracy destroying ‘coming of age’, you wished for in the Eurozone? Because that is what you’ve got.

  • David Allen 16th Jul '15 - 6:52pm

    Yes, I’m afraid that the idea that Europe has now “come of age” is indeed a “daft question!” Let’s put to one side the failure of Tsipras as a game theorist when confronting an implacable opponent, the failure of previous Greek governments who encouraged fraud, tax evasion and clientelism, and the unaccountable failure of Syriza to drain that swamp given five months to do it while being up to their necks in alligators (!) The question is, how did Europe do?

    They did terribly. They boasted about “waterboarding” a fellow European leader. They ignored the IMF who told them their plans were unworkable. They fell out with each other. They showed that the central countries could win everything and that they would happily let the periphery go hang.

    The PIIGS countries were far harder hit by the 2008 crash than the rich central countries, because of the divisive effects of the Euro. Central Europe is keen to contrast countries like Spain, who took the painful austerity medicine, with Greece, who sought to dodge it. But that is to play divide and rule. Both Spain and Greece suffered, albeit in different ways. Meanwhile the centre prospers on an artificially competitive exchange rate, while the periphery suffers from an artificially uncompetitive exchange rate. The euro is not just a huge technical mistake. It is a recipe for the centre to get richer and the periphery to get poorer. That’s why the central neoliberals are so keen to retain it.

    Leaving the EU would not help us – But we must demand reform. Starting with scrapping the Euro!

  • Katerina Porter 16th Jul '15 - 9:11pm

    This IS a Versailles situation and we should remember the consequences. The fascist party in Greece is on the rise. When voters feel their political systems are failing they look for alternatives, and in between the world wars capitalism was failing and people in many countries turned to fascism and communism. As for forgiving debt Germany was released from paying war reparations to the Greeks in the nineteen fifties, has also had other debt forgiven as have we and other countries. And Germany has profited from the euro because if it had still had the deutchmark it would have made it’s exports very expensive. And it is as usual banks, Greek but also German, French and other banks that have been at fault.

  • Christopher Haigh 17th Jul '15 - 12:08am

    We need to put a positive message out to the electorate as to why the EU is working well and contributing to our national prosperity. We also need to give a coherent explanation for failings in the working of the eurozone and how these can be rectified so that the advantages of the single currency can be clarified.

  • I disagree with much of the above article. The recent Greek crisis has demonstrated yet again that the EU does not have the confidence in their own currency to risk a Greek exit which is the only way to end the problem. The IMF board is now openly critical of the Eurozone which is committing the other troubled economies of Portugal, Spain Italy and maybe France to eternal austerity and unemployment.

    One possible solution is total integration whereby the successful economies continually provide financial support to the poorer ones. There are two problems with this. Most of the European public have never been consulted on EU membership or joining the Euro. Losing their remaining shreds of sovereignty may be a step too far. The second problem is that German taxpayers will probably refuse to pay the bills for evermore.

    No doubt the EU will soldier on, determined to keep the project going at all costs. But the clock is ticking and the people of the EU will eventually decide that enough is enough.

  • Richard Underhill 17th Jul '15 - 11:12am

    For the sake of reality and to avoid distortions by opponents please use accurate language. The “single currency” may have been an aspiration when we had fewer members, but it has a name, the “euro” which is accurate and shorter.

    It therefore does not make sense to say that “EU does not have the confidence in their own currency”. The Uk and Denmark have opt-outs, Sweden had a referndum and voted NO. Other countries have simply not joined. For instance the former Czechoslovakia split into two countries in 1993, but continue to do a lot of trade with each other. Slovakia is in the euro, the Czech Republic is not.

  • Richard, everyone agrees that Greece should not have joined the Euro and that they can never pay their debts. They should leave the Euro. EU leaders fear that if Greece leaves, the creditors will go after a bigger indebted economy, probably Italy. The EZ cannot afford to bail out the larger countries.

    Another fear is that if Greece leaves, others may do the same in order to regain control of their economies, devalue and restore hope to the people.

    Apart from the UK and Denmark, all the other countries are committed to joining the Euro when they are ready. Their “readiness” is receding rapidly. One of them recently estimate that it might be ready in 2053.

  • Christopher Haigh 17th Jul '15 - 1:18pm

    In relation to the Greek crisis can anyone explain if this is due to a)Irresponsible lending by the banking system b) irresponsible management of government finances, c) trade deficits or d) some other explanation ?

  • Michael Parsons 17th Jul '15 - 2:17pm

    By swallowing the ‘better together’ propaganda Greece committed to the euro and EU and so lined itself up for a thorough kicking once the hedge-fund community saw Greece really didn’t have a plan B. They are now jusing the usual ‘debt bolmb’ tactic to destory, take-over and asset-strip not just a major company but an entire small counhtry. Since iut must be poerfectly obvioyus toi the EU/Troika thgat Greece can never pay-off the tainted debts run up by the private banking system ( and indeed ought not to) the take-over is aimed at the destruction of Greece as a sovereign entity capable of acting independently at the will of its people. Take care: UK private and public debt is many times its GDP! and will grow with the latest cut-backs on money-transfersw to the poor. Th sooner we are out, and end the economic insanity of “austerity” the EU requires, the better for us.

    That grotesque grub, the euro scheme, pupates
    On Brussel’s weeds; crawls out with deformed wings
    A gilded butterfly that stinks and stings.
    Its venom’s drawn from deep-segmented hates
    That numb the public mind. It defecates
    Pretended debt, bespatters imagings
    Of Liberty the Parthenon still brings
    To Europe, which its avarice subjugates.
    The Isles of Greece! Did Byron fight and die
    So that your glory might at last decay?
    Never! You’ve guarded for eternity
    The sacred flame that shows mankind the way
    To search for truth, and shatter tyranny.
    May all the heroes stand with you today!

  • I like it Michael Parsons !

    ~ ~The Greek Lament ~ ~
    Financially embarrassed,
    our books in vermillion
    My creditors harassed,
    demanding their billions
    But I shall not waiver,
    to bankrupt the saver
    For this project that’s thine,
    and so it is mine
    So give me more credit,
    by Monday at latest
    And we’ll spend it by Wednesday
    and further the tempest.

  • Matthew Huntbach 17th Jul '15 - 5:24pm

    John Dunn

    Yesterday the Greek parliamentarians, voted to send their sovereignty to Germany, in exchange for an 86 billion Euro ‘Wonga’ loan. So, far from coming of age, the EU is revealing its true colours. The EU delusion, was that somehow sovereign European nations could become a ‘federal family’. The implied notion was that all nations would be cooperative ‘team players’.

    But was it this Greek parliament which surrendered the sovereignty, or previous parliaments who agreed to budgets involving loans which could not be paid back? What we are actually seeing here is German banks wanting to be bailed out for making unrealistic loans, and none of the blame or consequences falling on them. What difference would it have made if Greece were not in the EU or Euro? Countries elsewhere have been unable to pay back debts, without a currency union being an aspect of the issue. If “everyone agrees Greece should not have joined the Euro” and so on, doesn’t that make it clear that what has happened is not an unexpected development, so the blame should have fallen at least in part on the lenders who knew perfectly well the risks they were taking?

    I quite agree that there is a foolishness in people who would normally say “Oh no, you can’t raise taxes, that just damages the economy and raises less money in the end” insisting the Greece tries to get out of the hole it is in by raising taxes. It seems to me the underlying problem was the lack of a contingency plan which set down rules for when it really was unrealistic to expect a country to pay back poorly considered loans.

    We will see something similar in this country when interest rates rise. People will be running to blame those who took out “mortgages they cannot afford” rather than those who profited from selling off houses at over-high prices thanks to those mortgages.

  • Assigning blame at this stage is probably pointless, but Greece fiddled the books and Germany and France were fully aware of it. The result was that Greece was admitted to the Euro as a basket case.

    Monnet, the founder of all of this, realised that without political integration the Euro would fail. He realised that political integration would be difficult to achieve in times of stability but with a currency about to fail the Eurozone members would have no choice but to sign up to a federal system. EU democracy at its best.

    We shall see. Personally, I think he underestimated the importance of democracy and public opinion.

  • The trouble with the referendum is that people are seeking to read into it what it was not. It was a yes/no to the deal on offer. The answer was no, and then a new deal was accepted. The new deal is arguably a little better than the old, but the IMF thinks it is doomed to fail, so maybe a little better is no better at all. Whether it was a referendum on euro membership is quite another matter. The towns voted yes, the country no. The old yes, the young no. The rich yes, the poor no. The young tend to be braver and vote for change, the old for stability. the rich to preserve what they have, the poor for a new start. Was that really a vote to stay in the euro, or a vote to refuse the bailout, come what may? varoufakis was pleased with the result. I am not certain Tsipras was. It is not clear to me that anyone will be pleased by what happens next, and that 60/40 vote is likely to become a bigger spread. I’d say Tsipras has ignored the people who elected him, the result of the referendum, and many members of his own party. This is not a recipe for future stable government.

    For the euro and the EU, its bad publicity all the way. People I know who were always anti EU are jumping up and down with glee.

  • At the start of this I argued the ECB must intervene to stabilise greek banks so that business could continue to be conducted. It did not, indeed it used closure of the banks as a tool to enforce a political decision by other EU states onto the Greek government. This is all terribly bad to my mind. The ECB demonstrated that as a central bank, whose first priority must be the stability of the currency and banking system, it failed catastrophically. Far from staying out of government affairs, it jumped right in.

    Had the ECB ‘held the ring’ and kept the banks functioning, it could have demonstrated the viability of the euro. The Greek government would have gone bust, just as any ordinary creditor, but Greek trade would have continued. The precise definition of maintaining stability within its area of remit. Instead, it used its power to enforce acceptance of debt onto the Greek government. While it might not have broken its charter commitment not to finance governments, since it was rather sucking money out, this hardly seems in the spirit of its founding principles to be an independent guardian of the currency. If its optional where you guard that currency, the guarantee becomes meaningless. Might be France next.

    The deal is an accounting exercise in postponing placing bad debt onto the balance sheet. A lot of that has gone on in recent years. This seems to have been done to appease voters in various countries. The calculation is that this deal will be less politically costly than tallying up the real bill right now, and dealing with the necessary bailouts somewhere else instead. I’m not convinced. It feels to me like a fundamental divide over what sort of institution the ECB really is, and its the wrong sort. The problem is not the euro, but the bank.

  • Christopher Haigh 18th Jul '15 - 8:43am

    If you get your information from our media you get the impression that Greek problem is because their Government pay out too much in benefits. As soon as you research the problem for yourself you realise that the problem is bound up with an arms race between Greece and Turkey, fuelled by US international aid and cheap credit available from European banks based on the strength of the euro that Greece would never have got with its original currency. Thanks Matthew.

  • Michael Parsons 18th Jul '15 - 9:59am

    There are obvious flaws in the EU policy.
    First you cannot avoid bankruptcy by borrowing, since each borrowed ‘asset’ is a liability plus interest.
    Second less than 10% of the ‘bail out’ goes to Greece, it is simply routed on to the French and German etc. banks who made improvident loans not using their depositors’ money (which is not involved, no-one’s savings are at risk except so far as all money placed in any bank ceases to be the depositor’s money: he becomes only a bank creditor and his place in the line-up for a payout can be changed or ended – recall Northern Rock- especially now by the ‘bail in’ rules the BoE has now allowed in an emergency)) – the loans in fact arose from recklessly creating new ‘fiat’ money (since bankers debts are money under that system). As to the destination of ‘bail out money’ it is not the Greeks that will be recklessly spending it, they be lucky to get a sniff at 10%..
    The politicians transferred the private debts of the banks to the taxpayers’ account as Gordon Brown did in UK, thus exposing the Greek (and UK) taxpayer to the follies of the hedge funds and credit-creators. It is noteworthy that we hear no mention from the EU of bringing the bankers to book, or of removing control of the banking utilities such as cheque clearance and SWIFT from them, so as to permit a degree of competition. The worship of money in the EU to the destruction of national boundaries, traditions and beliefs, and of direct democracy, compares to nothing so much as the religiosity of IS, only the ‘troika’ is selling-off and dispersing national treasures rather than using sledgehammers.
    To n restore a semblance of Liberal decency we need to to take a firm stand against the EU: since no referendum result hostile to the moneybags has ever been allowed to stand, spectacularly so in nthe case of Greece, we need to prepare bourselves with additonal measaures to enforce the will of the people in the event of an ‘out’ result. But as liberals I would have thought we should be campaigning for awareness of the need to stop the smashing of a country and the wanton infliction of misery on the population by schemes that at best prolongue the wretchedness. Leading a coalition of Southern Europe against the deliberate denial of democratic control over national budget deficits (while leaving bank liabilites untouched as a source of fake money creation) might be a start?

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