The July 12 declaration of the Euro summit is a document of failure

The July 12 declaration of the Euro summit is a document of failure

It is about time to consider a socially responsible liquidation of the euro zone

by Karl Müller

Much has been said and written in the week following the resolution of the 12 July Euro summit. The resolution itself and the route towards it have been criticised massively. It is remarkable, however, that there was nearly any voice daring to question the system as a whole.
Rather left-wing critics of the Euro summit see the resolution as a step towards the destruction of the sacred euro area and the European integration towards a federal state EU. Mainly the German government is a target of this criticism. Critics are speaking of an attack on democracy, of a debasement, humiliation and disenfranchisement of Greece. In the same breath they demand more EU. Does that make sense?
Other critics are arrogantly attacking the Greece government and its previous policies up to now. Greek should be excluded from the euro area; they say, the euro area could not be a transfer union with economically highly heterogeneous states. There is talk of that instead the EU needed more discipline and leadership, possibly German discipline and German leadership. Is this a just perspective?
Why is hardly anyone saying the obvious, i.e. it is now evident what some people like professor Karl Albrecht Schachtschneider and his colleagues have been stating for more than 15 years: The artificial construction, imposed top-down, of a uniform currency for very diverse states with very diverse traditions and ways of living, with very diverse economic structures and power, with very diverse political mentalities can only be held together at the cost of severe contortions or a self- cementing dictatorship where the doings of the states and their citizens are decreed top-down. This implies an end of all freedom and democratic sovereignty.
Yes, the July 12 declaration of the Euro summit is a document of shame. 19 heads of states and governments of European states have signed a declaration which can only be understood as a diktat for Greece and an insistence on its complete self-abandonment and surrender.
The current Greek government has to take the full blame for the country’s situation. The government is made to renounce itself because – as the declaration stipulates in Orwellian diction – “The Euro summit stresses the crucial need to rebuild trust with the Greek authorities”. This is grotesque! The measures demanded from the government are all continuing the path that has led Greece into its current run-down situation. The 19 heads of states and governments even take the liberty to claim that “the Euro summit recalls that the euro area member states have, throughout the last few years, adopted a remarkable set of measures supporting Greece’s debt sustainability, which have smoothed Greece’s debt servicing path and reduced costs significantly.” It was only “the easing of policies during the last twelve months [by the Greek government] which resulted in the recent deterioration in the domestic macroeconomic and financial environment.”
Since the Greek government cannot be trusted and neither the Greek parliament nor the Greek people – which have proven quite insubordinate on 5 July – should be allowed to decide freely, there are “quasi-automatic spending cuts” in the Greek budget, “in case of deviations from ambitious primary surplus targets”, of course only “after prior approval of the institutions [i.e. the IMF, the ECB and the EU Commission]”. Since the Greek cannot be trusted, all further measures have to be taken “in full prior agreement with the institutions”. The national assets of Greece are to be subjected to a fund so that they can be sold to the private sector, most probably foreign investors. And because the Greek cannot be trusted here as well, the “supervision of relevant European institutions” is stipulated. Even the “modernisation” of the Greek administration which will mean mass dismissals in the public service, is put “under the auspices of the European Commission”.
The following is to be conceived for Greece: “The government needs to consult and agree with the institutions on all draft legislation in relevant areas with adequate time before submitting it for public consultation or to parliament.”
Negotiations regarding the new “financial aid” requested by the Greek government (money to pay off old debts) are held out in prospect, but “the risks of not concluding swiftly the negotiations remain fully with Greece.”
Indeed a document of Greece’s shaming and humiliation, as well of an unbearable display of conceit by the other Euro states. But even more it is an expression of failure. The declaration is not worth the paper it was printed on. This style of open dictatorship will antagonise Europe and the Europeans even more than in the past years. Recent reactions do indicate this. And we can only say: step by step, things will break apart which do not belong together. The only questions will be: what is the price? The best solution of the euro zone would be a controlled insolvency – without too many sacrifices for the people. What is currently being practised is delaying the filing for insolvency. Why not start to consider liquidating the whole euro zone (and maybe also the EU in its present form) in a controlled and socially responsible way? Why not give the states in the euro zone and in the EU more sovereignty and hence more independence and responsibility? The current profiteers of the euro zone and the EU have as well to consider the current and future economic, political and human price of their project. Is this worth it? Wouldn’t it be, in the long term, a much more tolerable situation if Europe was relying more on values like freedom, law, democratic sovereignty and human dignity? Even if Big Brother beyond the Atlantic would not like it.     •

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