THE SUNDAY TELEGRAPH: Europe's leaders will do their best to put on a show of unity as early as Monday when they announce that they stand ready to help Greece recover from its financial disaster.
But the deal is just a thin veneer over permanent disagreements about how to run the European Union, and Brussels is about to embark on another round of damaging internal debate which will further distance it from the bloc's 500 million citizens.
Greece is the weakest but not the only member of the 16-country eurozone in deep trouble. It must borrow over 50 billion euros on the international markets this year or else it could go bust. The other countries that use the euro, led by Germany and France, are likely to say that their private banks will guarantee to help meet those financing needs should willing investors turn out to be in short supply. That, allied to a massive round of spending cuts inside Greece designed to reduce the budget deficit, should be enough to calm markets and stabilise the situation.
It won't stop Greeks from rioting, however. Just as in the UK, US and everywhere else, ordinary workers can't see why they have to swallow pay cuts, tax rises and cuts in services as a result of incompetent politicians and mendacious bankers. Greece's socialist government, recently elected, is suffering from internal dissent at the price to be paid for outside help. The deficit is more than four times higher than eurozone rules allow, but reducing it could be a dangerous process in a country plagued by social unrest and which was under military rule as recently as the 1970s.
As for the rest of the eurozone and the European Union, the big beasts of the continent - the UK, France and Germany - have never seen eye to eye on the level of economic oversight and political interference they would countenance from Brussels. It was hoped that the passage of the Lisbon Treaty, the reforms of the EU's rules and institutions just enacted after much pain, would still that debate and end internal wrangling for a decade.
Instead, Greece's problems, and those yet to be played out in full in Spain, Portugal, Ireland and elsewhere, have exposed the messy and inadequate compromises agreed for the co-ordination of vastly disparate economies. It hasn't worked; a new framework is required. >>> Adrian Michaels and Bruno Waterfield | Sunday, March 14, 2010
