Opinion: Historia est Magistra Vitae: no Grexit, no Greece

The last few days showed the EU as a very resilient organisation: the Bundestag had just approved the Greek bailout, after Finland, France and Austria. But it also showed EU stretched to the breaking point: there is no Grexit but there is no Greece either.

Let us step back and look at the recent past from the future perspective through the prism of the UK. 100 years hence the history of the UK could read like this:

At the beginning of the 21st century the UK was the only state able to offer an alternative to the Franco-German concept of unified Europe. But, rather than introducing UK’s own concept based on liberal values, individual independence and social liberal policies, the UK spent its energy on questioning the EU concept (so called ‘opting out’) and fighting in-between themselves under the then Conservative leader Cameron. This meant that the UK was not offering any viable alternative and completely lost its direction. With the diminishing role of the USA, the Anglo-Saxon governance model, so prevalent during 19th and 20th centuries ceased to play any meaningful role as ‘the bureaucratic super-state’ took on an ever increasing role.

Nowhere else was this role of a powerful state exercising its interest so obvious as in the introduction of a common currency (see Euro). Creation of a union where a common currency plays the major unification role was a well rehearsed experiment for Germany. The EU unification at the beginning of the 21st century was not dissimilar to the 19th century German unification (bund) when Otto von Bismarck introduced a currency and a custom union to unify ‘German speaking states’ (Zollverein). But the UK failed to learn from the same history: In the 19th century the only power able to offer an alternative to Prussian (Bismarck) domination was the Austrian Empire. The Austrians of the 19th century had a similar position to which the UK found itself in 21st century.

Unfortunately, the UK decided to follow the Austrian reaction without due regard for the consequences: In the 19th century Austria fought the creation of the ‘bund’ rather than offer a credible alternative (see Prince Klemens von Metternich and Prince Otto von Bismarck). The UK adopted the same ‘negative campaign’ in the 21st century. With similar events and similar reactions the results were also similar: the same way the centre of European affairs moved from Vienna to Berlin in the 19th century, London lost its influence in favour of Frankfurt in the 21st century.

End of hypothetical future history reading.

To avoid the above scenario becoming true the UK needs to stop saying what it does not want in the EU and must fight for what it does want. Stop linking Grexit and Brexit. Start thinking: advancement, political autonomy, peaceful co-existence, fairness, liberties, human rights and personal responsibilities. This should also be a natural territory for the Liberal Democrats. Let’s go for it. EU” in or out” referendum should be our next defining battle.

* George Smid was the Liberal Democrat candidate in South Holland and the Deepings in 2015. He is a member of the East Midlands Regional Executive, the English Council Executive and is a former European candidate

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  • After his defeat of the French in 1870, der Eiserne Kanzler annexed the French territories of Alsace and Lorraine. In part this was vengeance against France, but it had another element; rather than explicitly annexing the territories to Prussia, he made them a territory of the entire Empire, thus giving the entire union a stake in the annexed territories (and making them complicit in the annexation), thus providing a locus for uniting the Empire behind Prussian leadership.

    Perhaps Kanzlerin Merkel sees Greece in the same way; if she can turn Greece into an impotent protectorate of the entire EU, she imagines it will unite Europe under German leadership. The obvious problems in this scenario might not have occurred to her.

  • Richard Underhill 18th Jul '15 - 7:56pm

    A recent Danish thriller on Saturday nights also gave us answers to the Schleswig-Holstein Question, not just Lord Palmerstone’s answer, but also Queen Victoria’s. It seems unlikely that Denmark would invade Germany now.
    How do we sell these ideas on the doorstep?

    More recently the UK was allied to France in 1956 and jointly invaded Egypt.
    After the crisis was over France and the UK drew different conclusions,.
    If we say this on the doorstep will people listen?

  • It is a common belief that the Euro experiment – to put a currency union in place and make half-hearted plans for a political union to follow on behind it – was a serious but innocent technical mistake. George Smid’s article tells us that instead, it was “a well rehearsed experiment for Germany”. Indeed, it was rehearsed more recently on German unification, when Schäuble learned how to be tough and get away with it.


    But at least the end result in Germany was full political unification. Schäuble gave the East Germans a rough ride, but in the end he needed their votes and acted accordingly. Schäuble has no similar obligations to Greece. The words “ever closer union” mean “pie in the sky”.

    Our verdict on the Euro should be harsher than “innocent mistake”. To put a currency union in place, and to fail to follow that up with political union, is to plan an unequal empire, with a dominant centre and an exploited periphery. The Euro must go!

  • Or perhaps to put a currency union in place and to fail to follow through with the political integration is just that, a failure of governance. The European Union is working with a structure that must evolve or die. A federal Union is the key, two-speed Europe is the price.

  • Richard Underhill 20th Jul '15 - 11:38am

    As the Liberal Democrat News said at the time: “The Ossies said ‘We are one people’ and the Wessies said ‘We are too’.”
    The Ossies wanted parity for their Ostmarks with the Wessies Deutschmark, in defiance of market forces. West Germany was able to pay.

    They also rehoused 400,000 Soviet soldiers in Rusiia, transporting them by sea so as not to drive through Poland, provided substantial funds for construction in east to soak up unemployment and try to ameliorate the flow of Ossies across an open border into the west.

    Would South Korea be able to pay for North Korea in the same way? They are reluctant.

    The political capital was moved from Bonn to Berlin efficiently. Could we do that if we wanted to move our parliament out of London to Birmingham, Winchester, or “Elizabetha”?

  • Richard Underhill 20th Jul '15 - 1:56pm

    On Monday 20/7/2015 the banks reopened in Greece, albeit with restrictions.
    The press and media played up all sorts of negative possibilities, such as the need for eurozone parliaments to approve the bailout terms, but they were monitoring the progress of negotiations . The eventual deal went through quickly, which is not to say that it will stick, we will see.
    The price of gold tends to rise at times of instability, but it has reached its lowest point since March 2010. John Maynard Keynes called gold “a barbarous relic”. Those who take physical delivery of gold, such as the Bank of England, know about the costs involved in storing it securely for the middle to long term. Its price fluctuates up and down, but it does not earn interest.
    Other world events, such as Barrack Obama’s deals with Iran and Cuba look positive achievements. He is not a lame duck.
    People who say that Gordon Brown sold off some gold are probably echoing David Cameron, that a higher price could have been obtained at a different time. Technically right, but the same applies on a much larger scale to Mrs Thatcher’s sale of north sea oil at prices we do not expect to see again in the forseeable future. Would they rather have gold sitting in a vault or do we need to invest in roads, railways, schools, hospitals, houses, … … ?

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