Greece must leave the euro, but it takes the United States of Europe with it

July 10, 2015
A pensioner argues with an official as he tries to enter a National Bank branch to receive part of his pension in Athens

A pensioner argues with an official as he tries to enter a National Bank branch to receive part of his pension in Athens, Greece, July 6, 2015. REUTERS/Christian Hartmann

The Greek Kid finally meets the European Man this Sunday.

To write “finally” may be a folly: We’ve heard about too many so-called “crunch meetings” and “final deadlines” to take them seriously anymore. Even so, the summit of European leaders called for Sunday is so surrounded with finalities that the sheer embarrassment of proclaiming another one probably means some conclusion must be reached.

In the 1965 Norman Jewison film “The Cincinnati Kid,” Steve McQueen’s Kid and Edward G. Robinson’s Man strip away, over days of five-card stud poker, all other competition and face each other in a final, climactic hand — which sees the Man win. “You’re good, Kid,” he says, “but as long as I’m around you’re second-best. You might as well learn to live with it.”

The Greek Kid has been “good.” He’s played his hand, founded on the correct belief that European Union leaders are desperately keen to keep Greece in the euro and in the EU. He’s negotiated with infuriating skill, culminating in winning a referendum against the EU’s last, last offer. But the European Man has the money, which is always the winning card. If, over this weekend, Prime Minister Alexis Tsipras and his new and hapless Finance Minister Euclid Tsakalotos do not produce a plan for reform credible for the other 18 members of the euro zone, the Man wins, and the Greeks either accept his terms, or leave the table.

Greece leaving the euro — Grexit — has now moved from being unthinkable to being desirable — if desirable is defined as the best terrible choice. The New York Times has two commentators favoring it: Paul Krugman writes, “There is now a strong argument that Greek exit from the euro is the best of bad options… If [the Greeks] can’t make a go of Europe’s common currency, it’s because that common currency offers no respite for countries in trouble. The important thing now is to do whatever it takes to end the bleeding.”

A guest to the Times, Jochen Bittner, political editor of Germany’s prestigious weekly Die Zeit, writes, “Neither the euro zone nor Europe is best served by holding on to Greece. Instead, the European Union needs to come up with a smooth way out of its dilemma, namely an orderly exit by Greece from the euro.”

The Guardian’s Simon Jenkins believes, “There must be Grexit this weekend. It is light at the end of the tunnel, the best possible outcome from Greece’s agony and, in truth, the only one.”

But not everyone is so sure.

The FT’s Martin Wolf, like Krugman a strong critic of the EU’s short-sighted harshness towards Greece, favors a last chance, based on using the European Stability Mechanism to fund maturing loans from the IMF and others, extending debt repayment far into the future while capping interest rates and providing Greek banks with the necessary liquidity. But he admits, “The logic of where it is now is definitely towards the exit.” And Latvian Finance Minister Janis Reirstold reporters that EU-imposed austerity had helped his Baltic state overcome its economic problems, and that Greece’s departure “can even be positive,” adding, “Latvian people do not understand the Greek people.”

This “lack of understanding” is probably the majority view in Europe, based on the logic of the winning card: the EU has money; Greece needs money; Greece needs to do what the EU asks to get money.

When Tsipras and others invoke the need for solidarity, they strike a hollow note. When Tsipras complains that his fellow leaders are defying the wish of the Greek people, shown both in the election of Syriza and in the referendum, he’s met with 18 other leaders saying, our electorates are bigger than yours, and they have paid out enough, even, perhaps, too much.

Whatever the conclusion this weekend, it is clear and urgent that the EU requires the most comprehensive discussion on its future that it can muster. The basic contradiction described above — the need for greater integration for the euro zone and the simultaneous impossibility of greater integration for the euro zone — must be resolved.

This requires a sober and honest account from all EU members of how far their electorates will support greater integration. Not to mention how much “solidarity” can realistically be expected across a multi-lingual continent in which most people in all countries know very little about politicians in other countries.

Most importantly, the EU needs a plan for how to move from here. National parliaments still hold much larger powers than the EU. Integration would mean ultimately most powers move to a central authority in Brussels.

A United Europe could emerge but it isn’t about to now. The Greeks have highlighted one big thing: Solidarity is available, and can be very powerful, in one nation. But it is very weak across the EU.

4 comments

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Greece is the Mexico of Europe. Corrupt, lazy culture that drags the EU and Euro down. Be honest, not politically correct.

Posted by LetBalanceCome | Report as abusive

What a partisan piece of junk article.

Posted by Hulls | Report as abusive

The Mexicans are extremely hard working people. Their economy suffers from some of the same things as Greece such as corruption, tax evasion, etc.

Greece should not be in the Euro, but needs the assistance of the rest of Europe to recover!

Yes, trust is an issue, as the politically radicalized Greeks could easily elect a government that un-does these agreements. In fact, the entire Balkan region has, historically, been dangerous for Europe, such as the Serbo-terrorist assassination of the Austrian Archduke Ferdinand in 1914, which led to WW1.

Posted by RHW101 | Report as abusive

This isn’t the end of anything. Europe is not going away, Greece is not going away, money is not going away. Europe cannot sustain a strong centralized government. Okay, so live without a strong centralized government. It will be better is some ways, not as good in others. In a century, if you can stop shooting each other, try again. When, not if, Grexit, the EU will survive, Greece will stumble for a while but recover, and everyone will look at each other and ask why did we do so much drama.

Posted by ARJTurgot2 | Report as abusive