Feb 102012

I remember living in Paris some two decades back and my friends (and everyone they knew) in France, Italy and Greece didn’t have much good to say about the European Union. There had been protests in the 80′s as once separate political entities lurched into something approximating  a political and economic union. No one loved what was happening except perhaps those at the top (the 1%) who would benefit most from the free flow of currency and harmonization of archaic national laws and practices. The common refrain I heard: the EU is no good; but it’s surely better than more of the past. And the past in 1989 was still close enough (as it always is in Europe) with bullet holes and plaques marking the liberation of Paris from German occupation and the endless cemeteries holding the two million French (4.3% of the population) who died in World War I only twenty years before. Europe was a political swampland and a killing field in desperate need of a solution.

Fast forward to the present and the grudging optimism of this-is-the-only-doorway-with-a-future attitude is gone. Germany will happily remain in (and control) the Euro zone as long as they don’t need to bail everyone out. France, Spain, Italy are increasingly confronting their own economic woes and trying to stabilize a present that is really a previous generation’s vision of the future.

Violence in Greece - February 10, 2012

Violence in Greece - February 10, 2012 (CNN)

And poor Greece, the hardest hit at the moment, fingernails clutching a crumbling precipice as the European Union and the International Monetary Fund broker an agreement that avoids the broken promises of last year’s agreements and gets private lenders to take a fall for a new 130 billion euro ($172 billion) bailout. Unions are promising mass demonstrations, the unemployment rate in Greece is now at 20.9% and industrial output has declined 11.3% over the past year.

And the rescue package? More pain including pension cuts, a 20% cut in the minimum wage, and other restrictions. Perhaps worse from the perspective of someone on the streets in Athens or Rhodos – the government has to guarantee that the austerity measures will not be undone by upcoming elections. In other words, goodbye democracy.

And now it has been made clear that there is no deal until Greece holds up its end of the bargain. At this point, the alternative of a default looks better by the day:

Jean-Claude Juncker, who chairs the Eurogroup, set three conditions, saying the Greek parliament must ratify the package when it meets on Sunday and a further 325 million euros of spending reductions needed to be identified by next Wednesday, after which euro zone finance ministers would meet again.

“Thirdly, we would need to obtain strong political assurances from the leaders of the coalition parties on the implementation of the program,” Juncker told a news conference after six hours of talks in Brussels. “Those elements needs to be in place before we can take decisions.”

“In short, no disbursement before implementation.”  (Reuters)

Those at the top of the political process – both in Greece and the EU – may think they hold the fate of Greece in their hands. It’s a useful conceit, but the truth of the matter is that it may ultimately be up to the people in the streets. Watch carefully the next few days.

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