18 May 2012

EP President Schulz's speech in Athens

In his speech, President Schulz said that Greece was standing at a crossroads, and that as a friend of Greece he sincerely hoped that the Greek people would continue to follow the European path.

The first hard truth is this: austerity measures and structural reforms can not be circumvented. It is a painful path to follow, because the privations of austerity are felt at once, but the benefits of structural reform can only be reaped later.

We must recognise this: an extremely high government debt of 160 per cent of GDP is not sustainable. We must recognise that the Greek economy is currently unable to compete. These are hard economic facts. They continue to exist, irrespective of whether Greece stays in the EU – and in the eurozone – or not. Even if Greece ceased overnight to be either in the EU or in the eurozone, it would have to reduce its debts and undergo a process of reform.

I fully understand how many people are uncomfortable about a bureaucratic power operating in their country as an anonymous troika. I am sorry, therefore, that so few EU politicians have come to Greece to explain these measures and try to win your trust. Politics needs a human face in order to dispel fears. The EU Troika is not harbouring colonial ambitions, but implementing a rescue package.

The second hard truth is this: no EU country will release the next instalment of the €130 billion rescue package unless the next Greek government adheres to the commitments that have already been made. Europe is based on the principle that agreements must be complied with: 'pacta sunt servanda'.

People stop trusting an individual who breaks his word. Greece's reliability is at stake; but so is Europe's. The so-called 'euro crisis' was also partly caused by a loss of confidence in the European governments' will to fulfil the requirements of a monetary union. The Greek Government, as this country's representative, reached an agreement with the Troika: an austerity programme in exchange for a support package. If Greece wants the Troika to keep its promise to pay the next instalment, which Greece needs by the end of June at the latest, Greece must also keep its promises.

We Europeans are all in the same boat. Because it is only by acting together that we can weather this storm. And because everyone must play their part, out of solidarity and responsibility. Some by providing support in the form of loans, others by introducing reform measures. My own country, Germany, has guaranteed €401 billion under the rescue package. That is more than Germany's entire annual budget. 

Your fellow peoples of Europe have undertaken to make these huge efforts in order to help you. Europe is standing beside you in solidarity. Take Estonia or Slovakia as an example. The per head income is below the one in Greece. Still, these countries are contributing to the rescue mechanism. This is true European solidarity!

Trust is founded in the reliability of both partners. If the next Greek government does not keep the promises that have already been made and adhere to the agreements that have already been reached, many people in neighbouring countries will have the impression that Greece does not keep its word. Who would approve new loans then? It is only natural for people to want to get back the money they have lent.

If you let down those European politicians who, up to now, have called again and again for Europe to show solidarity with Greece, and if you disappoint the very people who were prepared to support you from their taxes, the only people who will be left to negotiate with you in the end will be the ones who see only figures, not people.

If you give up now, the next instalment of the bailout will not be paid. What that means is that the Greek State will have no more money in future to pay salaries, to pay pensions, to pay unemployment benefit, to keep the schools and hospitals going.

People who say that all you have to do is not pay anything back are failing to mention that Greece would then receive no more credit, either from banks or from countries. Those who say we don't accept the memorandum, but we will stay in the eurozone, nourish a fake hope. They promise relief but in reality they will lead the country into devastation. People who say that Greece need not abide by the agreements may be reflecting your gut feeling. I understand people who are now thinking: better get the horror over with. But that gut feeling is misleading.

The people who say that Greece need not abide by the agreements are failing to say that that can lead to only one thing, Greece's departure from the eurozone. They do not say what will happen next, and how Greece will get back on its feet again. They fail to say that, once outside of the eurozone, the horror will only just begin for the Greek people, and the people who will be most severely affected will be those who are already suffering most. You have a hard path to follow now, but the path would be even harder outside the eurozone.

One only has to read the writing on the wall to recognise that there are signs of a change of direction in Europe: we are changing course towards a policy of growth. That is a sign of hope for the European economy. It is a sign of hope for the people who, everywhere in Europe, have had to bear the burden of the consequences of the financial and economic crisis. It is a sign of hope for the Greek people who have had to suffer such painful sacrifices.

Full speech

© European Parliament