04 August 2015

The Guardian: Left-wing Eurosceptics are wrong to use Greece as a reason to leave the EU

The new phenomenon is the surge in leftwing Euroscepticism. This is based on the perception that Greece has been bullied into accepting austerity by other eurozone countries, led by Germany. [...]

If this impression takes root, it could have severe consequences. It could undermine the left’s support for Britain’s EU membership. Given that the Conservative party is also split on the issue, there would be a serious risk that the country might vote no in the coming referendum. David Cameron has been careless in calling such a vote and blithely assuming he can rely on Labour backing yes solidly. But being able to pin the blame after the fact on the prime minister will be little comfort for pro-European progressives if the result has been Britain quitting the EU.

There is much that is correct in the left’s narrative on Greece. For example, the euro was badly designed, with a bias towards deflation. What’s more, Greece should not have joined the currency, as its economy wasn’t fit enough to endure the straitjacket of a single monetary policy.

Once the crisis hit, Athens should have been allowed to default on its debt (much of which was then held by foreign banks) rather than borrowing extra money from fellow eurozone countries. It should also not have been required to implement so much debilitating and self-defeating austerity.

But there is also much that is wrong in the left’s narrative. It doesn’t mention that Greece had many deep-seated problems that pre-dated the creditor-imposed austerity: rampant tax evasion, an epidemic of early retirement, a bloated public sector and a private sector carved up by special interests. [...]

The left narrative also ignores the fact that the creditors’ tough love policy has worked in four other countries: Spain, Ireland, Portugal and Cyprus. [...]

Syriza, of course, blames the creditors for the recession, arguing that they ran a deliberate policy of choking the economy in order to bring the government to heel. But, while the eurozone has not played the role of an angel, the main culprit is the prime minister himself.

Tsipras made wild pre-election promises that he couldn’t deliver; he chose a confrontational firebrand, Yanis Varoufakis, as his finance minister; and he failed to develop either a credible plan for cutting a deal with his creditors or a proper plan B in case he was unable to do so. Britain’s progressives, however much they sympathise with the Greek people, should not align themselves with such incompetence.

[...]

Of course, countries should try to help one another – especially close allies who share the same currency. [...]

What we would be doing is sacrificing our own interests. We would be settling for second-class access to Europe’s single market, which accounts for half our trade. We would also be diminishing our ability to address a range of challenges – such as global warming, organised crime, terrorism and Russian militarism – that cross borders. That wouldn’t be good for Britain. Nor, for that matter, would it be good for Greece.

Full article on The Guardian

© The Guardian