The Berlin wall & the PIIGS
by Constantinos Alexacos
A few months ago, the western world celebrated 20 years since “The Fall of the Berlin Wall”. An different anniversary, that wasn’t celebrated was 60 years since the end of Germany’s Allies occupation, following WWII (1945-1949).
Sixty years is a long time, even for a place like Europe. The question is whether it is enough, for people to change. Seventy years ago, the Nazi movement was gaining popularity following The great Depression. Germany’s reaction then was to lash out against friends and foes (Lithuania ultimatum, 1939) in an attempt to regain grounds it had lost after the Versailles Treaty. A new German realm was the goal and WWII was the result.
The European Union was created in the aftermath of all this, in an effort to ensure peace in the future. A political union that could not exist without an economic one.
9 May 1950 — French Foreign Minister Robert Schuman presents a plan for deeper cooperation. Later, every 9 May is celebrated as 'Europe Day'.
In a few months, we will celebrate “Europe’s Day”. Following the recent European press, I am having great difficulty understanding the meaning of today’s Europe. Six decades have past and I see no political union. All I see is the €uro. The borders are guarded by member States, the foreign policy is dictated by Sovereign interests as is the common currency.
The PIIGS are a European matter, which is dealt according to German interests. This is not what we agreed when entering the EU. We entered a political Union, not the federation of the Deutsch Mark. Yes, the Greeks were slow to reform, and yes they had financial discrepancies. Who didn’t? Greece’s difference is that it benefited the least from this Union, a prime example being its defense spending, that amounts to an average of 6% of its GDP to guard European borders. Greece received financial incentives to change its economy, only to return them by importing German, British and French goods - not to mention military supplies. On the CIA’s Factbook, Greece holds the 26th place (out of 173) in military expenditures. The following €urozone country is France at 2.6% in 61st place. [Portugal 72nd @2.3%, Italy 93rd @1.8%, Germany 109th @1.5%, Spain 128th @1.2%, Ireland 146th @0.90%].
To achieve this kind of excessive spending on military supplies (to guard EU borders), as well as other imports and infrastructures (like the new airport that was built by the German company Hocktif) Greece borrowed. It borrowed a lot. In 2004 it owed 164 billion €. Today Greece owes more than 300 billion €. And yes, some of it went on bribes to corrupt government officials that partly facilitated this spending (eg SIEMENS, MAN, ...).
Are Greeks to blame? Yes. Of course we are. But we are not alone in this. There is also blame for (mainly monitoring) procedures that didn’t exist or weren’t followed within the EU. I find it hard to believe that no one noticed for 2 years, that the previous government rose public spending from 45% to 75% of all economic activity. I am having difficulty understanding why the Commission kept quiet until the recent election was won by G.Papandreou (by more than 10% gap) with an agenda of reform. That surely proves that the Greeks want to see this change. I definitely cannot understand why on earth would Almunia, Triche and other officials decide to fuel the speculative press with their initial reactions to the Greek problem. Didn’t they know prior to October 2009? If they knew, why were they so silent? Can anyone really see any fairness in all this?
What I really don’t understand, is why the EU (or should I say Germany) is determined to force economic measures that will harm growth, only to reduce the budget deficit. Measures that were usually adopted by the IMF with well documented destructive results for the peoples involved. Before I have an answer, I would like to see a full report on our spending/income, 1979 onwards. If all this aggression is fueled by the subsidies received, I would like to see the bill to-date, including all EU imposed penalties on Greece, and our foreign expenditure on cars, goods, and arms.
Then I’ll understand who benefited from this wondrous Union, by how much and at what cost. Until then, I refuse the term PIIGS, I refuse the VAT increase, I refuse the challenge to our Sovereignty and I definitely refuse the press’s racist approach to a political and financial problem. We have seen this before. Markets don’t have the time nor the will to reflect on history and determine long term goals for the people. That is the basis of politics, and it is good time we see some of it. Enough.
All we asked for, was time. All we got, was abuse.