Back to the precipice

Back in January 2010 the sum that would have sufficed to bail out Greece amounted to around 28 billion euros, and a rescue plan of that magnitude was being readied as Le Monde reported. Germany torpedoed it. Today the cost, only for Greece, is roughly 200 billion and counting -not to speak of the dizzying sums that are also required to buttress the European southern periphery but also, conceivably, the healthier core of Euroland. But Merkel is still stalling, in full knowledge that another dud of a solution at Thursday's Brussels summit risks igniting a market stampede.

Why is she persisting with this wrong-headed approach? It could well be the dogmatism of the famed "Swabian housewife" which she is in thrall to, a fundamentalist protestantism of economic surpluses of the kind immortalized by Max Weber's great book with a generous dollop of memory of the runaway inflation of the 1920's thrown in.

But a true statesman cannot remain indebted to the past in this slavish fashion, for then he/she risks sacrificing the future of the substantial progress of European unity achieved so far. Whatever the truth concerning Helmut Kohl's reported thrashing of Merkel's policies as undermining Europe (and there is no smoke without fire, despite the obligatory denials) the real effect of her stubbornness seems to be exactly that. So much so that it gives rise to the suspicion that she has actually charted a non-European course for her country. This is the frustration reflected in Sarkozy's comments, reported yesterday in Le canard enchaîné, even though -again- the report may have been exaggerated.

For once the Greek leadership seems to be in the right in the current juncture: the Greek government has adopted all the harsh measures asked of it and at great political cost (they are not going to survive the next election, if things continue as they are today). It is now Europe's turn to devise a drastic and definitive solution to the debt crisis. It is simply unfair and also suicidal to keep harping on the deficiencies of the Greek tax-collecting apparatus as well as on the endemic populism of the worthless politicians here.

These things are true, they are the facts of life. But the whole thing turns on whether one will simply bow to the inevitability of their wreaking havoc with the European idea, or whether Europe will rise above them -even if this means in a sense rewarding the vileness of the Greek establishment (the proverbial "moral hazard"). At this point it might very well be that the price that Europe must pay to save itself is precisely taking upon itself the costs of the profligacy of the Greek establishment.

This is indeed morally outrageous and politically very hard to sell to the northern European electorates. But what if punishing the Greek kleptocracy with all the harshness that it deserves also involves the demise of the European project as a whole? Would the satisfaction of seeing the incorrigible Greeks stewing in their own juice (for they plainly do not want to be saved) be reward enough for the world-wide havoc that will ensue when both the Euro and the European union unravel? Only a fundamentalist madman would answer in the affirmative.

It is clear in retrospect that admitting Greece into the European union, and especially into the Eurozone, was a monumental mistake. But the clock cannot be turned back. And besides at that time nobody could have foreseen the utter degradation of Greek society following that admission -least of all thousands of people, such as myself, who abandoned careers abroad to join what we saw as the project of building a new society of justice and welfare here. All we can say now is that we were all victims of a noble illusion that soon enough turned into ashes.

On the other hand, the original architects of European integration plainly had in mind a process of political as well as economic unification as they laid out their plans. This vision was informed with the lessons of recent history, lessons much greater than the episode of astronomic inter-war German inflation that currently mesmerizes the ruling coalition in Germany. The goal was political and cultural and not just economic -and Germany herself declared as much when she incorporated her eastern territories at crippling economic cost.

It was clear from the outset that -to put it bluntly- if Germany were to mitigate somewhat the shame of her recent past she would have to pay through the nose. She would indeed have to become the paymaster of a united Europe with a European Germany in its core, which meant jettisoning the dangerous aspiration of a German Europe. As I wrote back in May 2010 Madame Merkel would simply have to shut up and pay up, if she still was interested in the European vision of Schmid and Kohl. The political implication of this was a move towards federalism or con-federalism on the institutional plane. The common currency was the opening gambit in such an evolution, and it is simply disingenuous to argue otherwise. If the Euro is seen as the end of an economic, rather than the beginning of a political, process it has no future.

Germany is, fortunately, strong enough to undertake this journey, however unpopular it may to the readership of Bild. It is powerful economically, politically and culturally. In a curious way Merkel's prevarications evince a pusillanimity at adds with the immense energy and drive at the core of the society that she represents. Her incessant to and fro is, thus, a betrayal of the best in the German spirit.