Greece and the European Union in an Era of Uncertainty

GUEST WRITER, Vassilios Damiras, a Defence Analyst in the USA, shares his opinions.

The economic and political crisis in Greece has created a new era of questioning the effectiveness of the European Union (EU). Greek involvement with the EU had several causes. Greece became an associate member in 1962; this diplomatic affiliation suggested that Greece’s long term goal was to join the ranks of Western European Democracies. It also reflected American interests in the construction of a United States of Europe under the auspices of the North Atlantic Treaty Association (NATO).

The accession to full membership in 1981, nonetheless, reflected more politics than economics. The United States did not intervene to oust the Greek Colonels in 1967, nor did it intervene to prevent the Turkish invasion and occupation in Northern Cyprus in 1974. Thus, Greece tried to find a new patron. Also, membership to the then European Economic Community (EEC) meant that Greece would not drift again to a military dictatorship. However, the EU did nothing to stop Greek socio-political corruption.

Greece, as a full member of the community and later the union has been enjoying all the economic, political, and cultural benefits of a new united Europe. Greek politicians found new opportunities and various ways to engage in a politico-economic orgy of spending and development cronyism. Hence, Greece ended up owing billions of Euros to various creditors and today faces bankruptcy. Both political parties the New Democracy (the conservatives) and PASOK-Panhellenic Socialist Movement (the Socialist) are to be blamed for the socio-economic and political crisis. Specifically, PASOK who started the financial orgy in the 1980s, and New Democracy in later years who did nothing to stop it.

The Greek financial crisis threatens to destabilize the EU and the global economic stability, due to interdependence economic links across the globe. In addition, the crisis is getting worst because, the EU has not had capable techniques or mechanisms to prevent the potential economic crisis in its union.

Since 2009, Greece has been experiencing guardianship under the International Monetary Fund (IMF), the EU, and the European Bank (known as the troika). Various memorandums have passed to create a free market environment in Greece and via heavy taxation to collect money and pay the creditors. In addition, they provide financial assistance to Greece. Thus, the new economic supervision coupled with the economic and political crisis has resulted in huge number of business closures, severe austerity measures, and high unemployment numbers.  The troika believes that extreme austerity measures combined with a wide program of privatization and severe taxation can create competitiveness in Greece. Greeks view that as a foreign occupation. Greece needs to face a politico-economic reconstruction. Under that, Greece needs to have lower taxation and privatization.

Moreover, the Greek politicians and Greek citizens believe that they can restore the old corrupt system and do business as usual. They cannot perceive that the party is over. In short, Greece has become a basket case. Recently, the Greek parliament debated a new memorandum with a new wave of austerity measures and high taxation, and privatization measures and finally, they managed to pass the new economic memorandum.