David Taylor-Gooby: If we want the EU to succeed it has to show it is benefiting ordinary people

Journal columnist and author David Taylor-Gooby on the lessons the EU must draw from the painful negotiations over Greece's debt

AP Photo/Lefteris Pitarakis Leader of Syriza left-wing party Alexis Tsipras
Leader of Syriza left-wing party Alexis Tsipras

As I write the two sides are positioning themselves for negotiations about Greece’s debt. By the time this appears in print the situation may have changed, but I’ll offer a few thoughts here about what the election of Syriza means for Greece and the EU.

I am reminded of the reforms of the famous Athenian ruler Solon I learnt about at school. He instituted the famous cancellation of debts, or seisachtheia – the shaking off of burdens – in the seventh century BC. What had happened was that poor farmers could only give their land and ultimately themselves as surety to borrow money, and if they defaulted could be sold into slavery. Maybe some modern Greeks feel the same way.

It is important to understand the history and background of the “southern” European states, the ones in the EU with the economic problems. If you look at their troubled histories in the last century, all have experienced dictatorships. Spain had a full blown civil war, and in Italy and Greece Western intervention, both overt and covert prevented the communists coming to power. It is generally admitted now, for example, that the CIA manipulated Italian elections against the communists.

They were all countries without a stable democratic culture and deep divisions. Greece received money from America after the war, and was one of the first countries to receive aid under the Marshall Plan in 1947. The Marshall Plan, which was aid to countries in Europe devastated by the war, was very generous. We should remember Britain received the biggest proportion. But I am sure that the Americans wanted to stabilise Europe against Soviet expansion and guarantee free markets in Europe.

So how is all this relevant to Greece today? In order to try to heal divisions the southern European countries all agreed deals, whether explicit or implicit, that the rich could keep their positions while generous concessions were given to the workforce. Greece is perhaps the worst example, with a powerful oligarchy of rich families, and a public sector which is too big and inefficient. Corruption was widespread and public sector jobs were often rewards for political support rather than serving the public good. The established political parties did not challenge this consensus.

The financial crisis of 2008 and resulting need for financial help brought all these problems to the fore. The Greek bailout required them to undertake the kind of reforms of which the Economist magazine would approve – balancing the budget and selling state assets. All this had the effect of shrinking the economy and producing austerity. The Greek Government was taken over by a “Troika” of the European Commission, The International Monetary Fund and the European Central Bank to make sure they stuck to the deal.

If I was an Athenian and knew my history, I would think it wasn’t much different from Solon’s time.

So it is no surprise that Syriza have done so well. The established parties had not challenged the existing system which had got Greece into this mess. Syriza had worked hard amongst poorer communities, people who had previously felt excluded from the political process.

They are inexperienced politicians and may say silly things. They are also quite crafty, exploiting the traditional friendship between Greece and Russia to gain concessions. (Both countries share the orthodox church). But the clear message they are sending to the EU is that the relentless enforcement of austerity is not going to solve the current crisis, and will turn people against the EU.

The European Union, understandably, is worried about defaulting on loans, but also about the fact that if Greece drops out of the euro, other countries could do so too. Greece only counts for 2% of the European economy, but countries like Italy and Spain are much bigger.

I expect the solution will be a messy compromise – it usually is in Europe. But if we want the European Union to succeed it has to show it is benefiting ordinary people. Even the Economist agrees it must deliver policies to start growth. If it falls apart the biggest loser would be Germany itself. Mrs Merkel should remember that.

  • David Taylor-Gooby is a freelance Writer. His latest book, “The NHS, a Challenge for us all” will be published in the spring

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