The Greek financial crisis is neither Greek, nor financial anymore. It is a
political crisis of Europe as a whole. Its solution is no longer financial.
It is political. It is no longer in Athens. It is in Brussels. The challenge
is now Franco-German.
Greece will never be able to repay its debts. If the numerous aid plans for
Greece, have succeeded so far in avoiding debt default, they have failed to
clear long-term liabilities. One must face the facts, which have been known
for a long time: no common currency zone can last without a dominant country
(such as the Franc Zone) or without some form of federalism (as in the
U.S.).
We cannot get out of the current crisis by an exit of Greece out of the
Eurozone, which would undermine within a few days, again, the European
banking system, and would increase the public debt of the other European
countries. Finally, we cannot expect a miracle from Greece, which would be
to settle in a few months 30 years of lax policy.
We can still hold forth on what it would have been necessary to do not to
get there. For Greece, first. Not allowing Greece to enter the Economic and
Monetary Union with falsified figures. Not letting grow beyond reason a debt
too large for the country’s economic foundations. Forcing the Greeks to
establish effective fiscal and economic institutions.
For Europe, next. In over ten years of single currency, we could have
established a European finance minister to control efficiently the economic
policy of each EU member state. Europe could have put to contribution, much
more than it did, the large European banks, with all factors pointing to the
fact – including the level of remuneration currently paid to their traders
and executives – that they have the means to cope. Finally, because one
comes out of a crisis by innovation and growth, Europe could have
implemented a program of massive support to European industry growth
investments: launching new Airbus by rail, some telecommunications, an
electric car or genomics. Make European decisions with courage once again.
For all this, it is too late. If we let Greece go bankrupt, it is the Euro
that will disappear. It is the very principle of the European Union that
will be challenged. Unemployment will rise again, Germany included, which
has up to now benefited from an undervalued Euro compared to its economy. If
we let Greece go bankrupt, an economic and political crisis worse than that
of 2008 awaits us. It is therefore necessary to change our perspective. To
stop thinking about the Greek problem, and start thinking about the problem
of the European Union. Solutions exist; it is urgent to have the political
courage to implement them:
1. Establish a European Minister of Finance;
2. Launch a “Brady plan for Europe” which consists of issuing European
treasury bonds allowing:
a) The financing over 20 years of debt problems for
Greece, Portugal and Ireland,
b) The launch of a Big european Loan to
finance the investments of the future for the Union;
3. These debts would be repaid through the levy of a European tax, a
broad-based complementary European VAT at a modest rate (1%).
It is urgent for Europe to find a solution of exit with the head up, to
actually be able to get out of the crisis instead of postponing it, such as
the implementation of a concerted “Brady plan for Europe,” and to be able to
foster effective innovation through the launch of a Big european Loan.
Europe, to date, is the world’s largest economy, ahead of the United States
and China. We have the economic resources; Europe must become political
again.