Opinion: Solidarity

POSTED: 11/14/11 3:47 AM

The Greek party seems to be over finally. For close to three decades Athens has feasted on the coffers of the European Union. The country’s leaders have lied and cheated, forged information or at least twisted it – all for one purpose only: to keep European funds flowing into the birthplace of Socrates, Archimedes and Plato.

Now the Greek Prime Minister George Papandreou has stepped down and there are doubts about the commitment of the new government under Lucas Papademos to the austerity measures Europe demands in exchange for its willingness to dump more billions into what many consider a big black hole.

Unfortunately, what happens in Greece in this field does not stay in Greece. In Germany the government ordered a report that examines the possible scenarios for the immediate future of Greece in general and of the monetary union in particular. In the Netherlands, Geert Wilders’ Freedom Party starts ruffling feathers by ordering a research into a possible return to the good old guilder.

On Friday, market researcher Maurice de Hond popped the question and his survey shows that 32 percent of the participants favor a return to the guilder. Among Freedom Party voters the preference is sky high at 72 percent.

There has also been talk about a monetary unions of the economic [powerhouses in Western Europe – the currency has quickly been dubbed the neuro (for northern Europe). De Hond found that 47 percent of the participants in his survey (and again 72 percent of Freedom Party voters) support that idea.

Wilders wants to examine the effects of a return to the guilder first. If those effects turn out to be positive, he wants a referendum. There is no majority for this idea, but at 43 percent the support is nevertheless strong and it has the potential to strengthen further in case the research suggests that the Netherlands would benefit from dropping the euro and return to the guilder.

In Germany, the government reckons with two scenarios. In the first one, the new Greek government refuses to implement the measures that are necessary to qualify for more European financial support. A Greek departure from the euro-zone would strengthen the   monetary union because Greece is considered the weakest link. This would benefit countries like Italy and Spain that would then be able to solve their own problems freed of the pressure caused by the crisis in Athens.

But the Germans, thorough as they are, also reckon with a worst case scenario. That foresees a dramatic devaluation of a new Greek currency, a further increase of the Greek national debt and another dent in its also extremely shaky creditworthiness. The country won’t have access to the financial markets anymore and as a result the Greek banks will completely run out of cash.

So what?

Well, many Greek entrepreneurs maintain their debts in euros and therefore many companies will go bankrupt, lots of people will lose their jobs and the recession will deepen. This in turn, could affect other countries.

The good news is that the German chancellor Angela Merkel prefers to keep the euro-zone in one piece; she has also expressed support for the new Greek government. At the same time, Merkel speculated at the G20-top in Cannes about Greece’s possible departure from the euro-zone, a rather transparent attempt to put more pressure on Papademos.

The worst case scenario would impact the Dutch economy, and force the government to go beyond its €18-billion austerity program.

Did you like this? Share it:
Opinion: Solidarity by

Comments are closed.