For Ysterografo News PDU’s Alexandros Semeloglou writes about Europe’s options in the face of the ongoing economic crisis.
Read the original article here (in Greek).
The creation of a federal European State with a common budget? Regarding the debt crisis in Greece, Benjamin Zeeb, CEO at the Project for Democratic Union deploys an analysis on the dilemma before which Europe is standing and the possible solutions to drive it out of the dead-end. His opinion, published on the World Commerce Review website, appears to be appealing for both Greece and the rest of Europe, and can be summarized in two possible scenarios.
Europe stands before a critical turning point. “While suffering from both internal problems and external pressure, the governance model of the European Union has failed”. For historian Zeeb, Greece’s problem is nodal for Europe.
“Time is up. It’s make up or breakup time for the Eurozone”
There is one lesson to be learned from the latest negotiation’s outcome between Greece and its partners in the Eurogroup: “For both parties the status quo has became unsustainable”. The last agreement reached has indicated this fact, even if Greece seemingly stays the course and Germany provides it with some manoeuvre space mainly regarding its primary surplus. It is of course a provisional agreement that will be reconsidered, while the following weeks “we will continue to hold our breaths” watching the developments in Brussels. Meanwhile, the uncertainty for European citizens and markets increases – as Podemos in Spain keeps winning space in polls.
Zeeb’s analysis can be based on the following facts:
On the one hand, all different economic approaches have one common ground: regardless of what might have caused this crisis, under the current circumstances there is no credible solution that could bring the European South back to the path of growth and prosperity.
On the other hand, the biggest weaknesses of the common currency’s creation process are now being exposed: a basic condition for a currency union to function is a coexisting “political union that would enable automatic transfers” (for fiscal balance reasons).
Consequently, the facts leave Europeans with two alternatives.
According to the first hypothesis, Eurozone will collapse and Europeans will return to the previous known monetary system. States will introduce their own currency; they will have an independent central bank and national sovereignty especially with respect to the financial policy. Thus, Greece, Spain, Portugal and Italy could partially regain their competitiveness.
Now as far as a sole controlled “Grexit” is concerned, the idea doesn’t seem to be beneficial neither for Greece or Europe. The German scientist Hans Werner Sinn assesses that 10 years without the common currency would provide the country with the necessary time needed to recover, however, such a long period would offer a great chance for external actors to exploit. According to Zeeb’s analysis, it would be naïve to believe that Putin’s destabilization tactics currently on display in the EU’s periphery would not cause additional problems of a geopolitical nature in a newly independent Greece; especially when the government of Alexis Tsipras has already “played rapprochement with Russia as a card in the current negotiations”. Under these conditions, it is rather doubtful that “Greece could ever again meet its European partners at eye level”.
“A mighty democratic union”
With a breakup scenario being undesirable for all parties, “only one solution remains”, says the political commentator, and that’s “the creation of a federal state based on the member countries of the Eurozone”.
In that case, “Europeans need to push for a single act of debt consolidation and parliamentary fusion to solve the dilemma once and for all”. The only way to achieve this is through a referendum. In order to succeed in the economic level as well, the resulting new Union “should be a transfer union, where transfers work through the union budget”. However, for the economic union to function properly, we would have to supplement it with a political union. With respect to the latter, the Project for Democratic Union, the political organisation, which Benjamin Zeeb cofounded in 2013, has suggested the establishment of a European Government: “a senate made up of two delegates from each constituent state”, namely the executive body, while the “European Parliament will fully take on its legislative role”.
What Zeeb wants to make clear is that political union doesn’t imply that citizens would have to give up their cultural identities or language. These elements should continue being preserved, as they always have been by the European Union. The new Union, under this suggested form, will “re-empower Europeans to make their voices heard, and their elected representatives will be the ones comprising the new European Parliament with the power to decide where we go as a continent”.
The benefits resulting from this Union wouldn’t be merely economic. “What we need”, concludes Benjamin Zeeb, “are new structure capable of turning the European promise of peace, prosperity, security and solidarity from a youthful and distant dream into a reality”.
Read the original Greek article here