Price of peace, unity in Europe

The News Herald (Link) - Georgie Anne Geyer (May 5, 2010)

The last time I visited the European Union offices in Brussels its top official quickly got to the core underlying hope for the unity of Europe in this era.

�After this, we will have no more wars,� the impressive Spaniard Javier Solana stated firmly, but also with a touch of wonder, �because our states will simply be too intertwined for that to be possible.�

Unquestionably, that single noble thought captured the passion behind the determination of many post-World War II Europeans who, since the 1950s, had patiently hammered out the principles and institutions of a united Europe. And today, their accomplishments, with 27 members in the EU and 16 members in the eurozone, are impressive indeed.

But now, as has so often happened throughout history, one of the smallest parts of the union is threatening to tear the entire magnificent weave apart. The miscreant, of course, is Greece, a country whose tax collectors have never quite matched its restaurateurs in cleverness.

And, irony of ironies, it is big, industrial, tax-paying Germany � the country whose larger depredations in the war formed precisely that postwar generation of Europeans � that the union would like to leave with the bill.

But while the �Greek question� has been debated ferociously now for weeks in Europe, few are raising the serious questions.

Even if Greece survives this crisis, in which it owes a mere $159 billion, will this mean that the dream of a united Europe, which has had so much hope, will be for all time maimed? Will the good will between the rich Europeans in the north and their poorer cousins in the south be forever tainted? Most of all, will the hope of no more wars among them lie doomed by the dry fiscal books of Brussels? Those are the real questions.

The reports from Greece are, in many ways, like the sudden revelation of a respected father whom one finds with three rather vulgar mistresses on his books at the bank. One-quarter of all taxes in Greece are not paid. Greece places last in the World Bank rankings of countries that control corruption.

Indeed, such an overall culture of corruption envelops the country that it has been reported that in 2008, senior government officials were accused of helping a Greek Orthodox monastery claim ownership of a lake and swap it for a large piece of public land. Taxpayers lost over $150 million for that deal alone!

Where, you might well ask, was the European Union? Its rules, for instance, permit a member country to hold a deficit of only 3 percent of its budget, and Greece�s was flagrantly beyond that.

The whole point of the union economically is that the union helps out the poorer countries, like Portugal, Spain and Ireland (and Greece), and that they put their houses in order. Instead, Greece apparently issued false claims, which were not uncovered until this winter.

But why didn�t the EU know this? Why didn�t it check on it? Therein lies the problem. The EU has really no capacity to punish malefactors. Despite the union�s 1957 Treaty of Rome, calling for �ever-closer union� and �concerted action� to bring the very different nations together, there is no common fiscal policy, no Europe-wide constitution, no effective European Central Bank. The bank in Frankfurt, for instance, can�t issue debt for its member nations or work as the Federal Reserve does in the U.S.

Even with these institutional problems, the real problem, as the Financial Times warned this week, is the lack of �the political will to enforce the rules.�

As the situation stands now, finance ministers from the 16 European countries that use the euro agreed Sunday to save Greece with $146.1 billion in loans over three years to keep it from defaulting. The International Monetary Fund has also been tapped for the first time for a developed country.

Germany is providing the largest European part, which has caused an uproar inside the country, as Chancellor Angela Merkel has been alternately praised as the �Iron Chancellor� for not giving Greece the loans, and as a weak leader for finally giving in. One problem here is that the Germans still think of the euro as a direct descendant of their beloved Deutsche mark.

This week, as things developed, former German leader Joschka Fischer said with regret that the EU will now develop as a weak confederation of states, not as a close federation. That would be a shame. Meanwhile, one of the new mantras in the corridors of the EU is simply, �Beware of Greeks.�