Why it won’t work

That was quite a close call thing. Those bloody Greeks almost brought down the euro. Thankfully, New Democracy got in and austerity measures can proceed apace. Angela Merkel will be chuffed.

Only it’s still damn unfair: this small nation of 11 million bullied into submission by Germany and the euro project.

The Greek conservative party New Democracy, under the leadership of Antonis Samaras, narrowly won the election, taking 29.7% of the vote, against 26.9% for Alexis Tsipras’ Syriza party. New Democracy is happy to accept austerity measures in return for the latest bail-out for their economy. Syriza is not.

My reading of the result is that it wasn’t so much a cry of support for austerity. It was more an expression of fear that suddenly Greece could be ejected from the euro (something that none of the main parties, including Syriza, actually want). Like in any election where the EU has a vested interest, there was a great deal of scaremongering going on. “If you back Syriza and anti-austerity, then you’re going to be leaving the euro, with all the horrendous chaos that will cause,” was the general message.

Actually, what I believe would have happened is, had Syriza got in and torn up the anti-austerity measures, Merkel and other leaders would have been forced back to the table to renegotiate the conditions of the Greek bail out. They would not have summarily ejected the country from the cosy group. They want this project to succeed too badly. At whatever cost.

Why I believe the euro cannot work is that, so long as we have democracy and those pesky national interests to contend with, the solution that Europe really needs cannot be adopted.

What the euro needs and has always needed for it to work (as Merkel knows only too well) is a centralised fiscal apparatus along the lines of the US Federal Reserve. Anything less is just prolonging the agony and postponing calamity. It’s a good solution and it would work. Sell our national governments to Disney Land and have a United States of Europe.

The problem is those pesky national interests – and countries simply do not want to cede power to some centralised body. Smaller countries fear that it would benefit the most populous and powerful nations (i.e., Germany and France). Larger countries are probably not mature enough to use such a body for the good of all.

So, whilst Merkel and others might push for this much-need centralised mechanism, it will not work. As long as there are those pesky national interests.

The Greek election result has perhaps eased the pain for the time-being, but it has far from resolved the problem.

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