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The ’09/11 issue in Europe is Greece

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Is there hope for Greece in the back-channels?

Blackjack in a casino

July 2, 2015 Comments (0) Views: 1917 Homepage

Next stop Europe: Double-down, Stick, or Bust?

Events of the past two weeks are unlikely to go down in history as the European Union’s finest hours. Fist-bumping and back-slapping aside, there were the ‘take it or leave it’ offers to Greece which turned out to be negotiable, the ‘indefinitely suspended’ Eurogroup meetings which reconvened only 30 minutes later, and intemperate squabbles between the partners regarding the migrant crisis. By the time all was said and done at the most recent European Union Council meeting, even Presidents Tusk and Juncker had fallen out, by all accounts. As their 3am press conference went to show, things in Europe often are darkest before the dawn, literally.

But Europe has developed something of a recurrent habit over the years actually taking advantage of the big events to have befallen it in furtherance of its ‘ever closer union’ ambition. And that raises the question of whether Europe has anything new to pull out of its hat now, in the wake of its crippling debt crisis and its ongoing struggle to deal with the issue of Greece.

In fact, the first proper plan to implement an Economic and Monetary Union (EMU) in Europe – the Werner Plan –was hatched in 1969, just months after the political demise of France’s Charles de Gaulle, who had also been stubbornly resisting the Union’s first expansion (which included Britain). Something similar happened in 1990 when the Intergovernmental Conference on Economic and Monetary Union was launched just two weeks after another ‘big beast’ was forced out of office, this time the UK’s Lady Thatcher (and EMU definitely wasn’t her scene, either). By mid-1993, a European recession and a stubborn German Bundesbank (does that sound familiar, by the way?) had put the EMU project in grave doubt, and policy-makers were forced to abandon their tight exchange rate targets under intense market pressure. But just three months later, the Maastricht Treaty was ratified, with 1st January 1999 set as an inevitable future date in which EMU would be in place.

Of course, on the face of it, it’s harder for Europe’s policy-makers to take another step forward now, in the aftermath of the latest crisis. Ten years ago, the peoples of France and the Netherlands voted against the draft EU Constitution. Upon reflection, Europe’s political leadership subsequently went ahead with most of the proposals anyway, in the guise of the Lisbon Treaty. But there have been growing doubts ever since about the Union’s ability to progress its ever-closer union much further, particularly with appetite for a Fiscal or even Political Union remaining so tepid in many national capitals. Last week, the EU’s so-called Four Presidents published their latest suggestions regarding the way forward for the EU. Well, let’s just say that it isn’t trending on Twitter, yet.

But all of that was before David Cameron announced his plans to force a renegotiation between the UK and the EU by the end of 2017, a point in time that just so happens to coincide with the next UK Presidency of the EU. Actually, there’ll also be newly elected French and German leadership in 2017, which will be only the second time in the past forty five years in which such elections have both taken place in the same calendar year. And, wouldn’t you know it, but the so-called Fiscal Compact – which David Cameron famously vetoed in 2011 – is also up for discussion by the end of 2017, when policy-makers have already promised themselves to attempt to integrate it into the Lisbon Treaty. Think about this again and you might even wonder whether UK Chancellor George Osborne’s recent announcement about a UK debt-brake wasn’t timed to allow the British to withdraw their Fiscal Compact veto when the time comes, in late-2017.

Heaven only knows where Greece will be by 2017, but one can’t help but think that it must at least sometimes looks jealously at the monetary and fiscal flexibility of the UK, and Sweden for that matter. Come to think of it, Sweden is another slightly thorny issue that needs tidying up at some point: strictly speaking, Sweden needs to be actively pursuing Euro entry, according to text of the current Treaties.

If he plays his cards right, David Cameron’s widely-feared and much-derided British-EU renegotiation might turn out to be the best thing to have happened to Europe since the fall of the Berlin Wall. Actually, the British renegotiation was about the only thing that was agreed during the latest EU Council meeting. Accommodating British demands may not quite count as a brash European Double-Down of old: more a Stick, to use a Blackjack analogy. But it certainly beats a Bust.

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