In an Elon Law Now commentary, Professor Antonette Barilla reports from Europe about growing concern across the continent over the evolving strategy to address the Greek debt crisis and the viability of the European Union.
Professor Barilla’s commentary follows:
“The Greek debt crisis monopolizes headlines, but the Greeks are not the only struggling member of the European Union. While it was the first of the developed countries to default on its debt, at least four others have done the same. While the causes of financial difficulties vary, Greece’s unsustainable fiscal blueprint is attributed mainly to robust government budgets, including considerable pension commitments and high public sector salaries. Some also point to government corruption and fraud as a cause for internal economic depletion that continues to corrode the financial infrastructure despite billions being poured in by bailout plans.
“The third, and most recent bailout, promising eighty-six billion euros, has unsettled not only the Greeks, but also its similarly situated EU companions. Spaniards, Portuguese, Italians, Irish and others are uncomfortable with what many view as a dangerous ‘buy-out’ rather than ‘bailout.’ While the economic fundamentals are clear, collateral is a necessary surety, the notion that a nation’s cultural identity can be purchased and brought under the control of a foreign government is difficult to accept. And while the austerity measures are, for some, a direct contradiction to the socialist spirit of Europe, the recent acquisition of Greek objet d’art, property, and infrastructure is a distressingly reminiscent of the despoiling many European countries suffered before, during and after both world wars.
“Greek payments on its two previous bailouts were meant to be generated from the sale of state properties and assets. Under the terms of the first bailout, Greek officials agreed to privatize around 50 billion euros in property and infrastructure as a way of raising money for its creditors. To date, 3.2 billion euros have come from those sales. Such a tremendous shortcoming is cause for concern. But the recent suggestion by the Germans that titles to Greek assets be moved to an ‘external fund’ in Luxembourg so the Greeks could not back out on their sale was met with unease and apprehension by many.
“The formation of the European Union was a phenomenal accomplishment for a number of reasons, not the least of which was the union of nation states that had been warring, and either conquering or being conquered by each other, for thousands of years. And while the younger generations of this century will be the first to have lived the entirety of their lives in a peaceful Europe, there are still those who recall with intensity, a world in which the sovereignty of their motherland and the safety of her people were unfailingly at risk. This is an important political and cultural point for non-Europeans to keep in mind when considering the predicament of the Greek state. While there are clear economic considerations to be made, the cultural issues are equally important. The cultural sovereignty of Greece must remain intact for the European Union to preserve the trustworthiness and commitment of its citizens. It would be destructive to the union for any one country to be viewed as having coordinated or controlled the economic demise of another, and to have stripped its people of their cultural identity.
“More than sixty percent of Greeks voted in favor of not enacting further austerity measures – the majority of those favor an exit from the European Union. If Greece were to leave the union, Italy and Spain are predicted to quickly follow suit. Most members view themselves as already having sacrificed a great deal for the whole. For many, the downturn in the quality of life since the inception of the Euro has kindled skepticism about the benefit of the union. When the average income tax in Europe exceeds thirty percent (with citizens of some countries paying well over sixty percent) people are wary of pouring additional monies into the preservation of a union that may not be worth, in their eyes, sustaining.
“And while the advantages and value the European Union brings to the global arena are vast, if the quality of life for Greeks and many of their neighbors doesn’t improve quickly, many will continue to blame the union and it’s Euro for their troubles. And, the question that ruminates in every working class household in Greece will soon have to be answered by other governments in the EU – ‘Is it worth it?’”
More information about Elon Law Professor Antonette Barilla is available here.
Elon Law Now is a recurring series of faculty commentary on current issues of law and policy.