Will Greece Unravel the European Experiment?

February 3, 2015 Topic: Economics Region: Europe

Will Greece Unravel the European Experiment?

The 19-member Eurozone may not have what it takes to survive...

Caving to debtors also would create political antagonism in wealthier countries footing the bill. For instance, the German public has little sympathy for Greece: In a recent poll, eight of ten Germans opposed easing conditions and three out of four rejected a debt cut for Athens. In another survey, six of ten said Greece should drop the Euro if it can’t pay. The Merkel government is being pressed by a new party, Alternative for Germany, which opposes Berlin’s defense of the Euro and backs Grexit.

Although the European Union is separate from the Eurozone, a break in the latter would impact the former. Esteban Gonzalez Pons, a Spanish member of the European Parliament, worried that: “If we start playing this game of ‘the more radical you are, the more debt we’re going to forgive you,’ we’re simply opening the door to have the European Union dismembered.” The European Project would halt and perhaps shift into reverse. Yiannis Kitromilides of Cambridge University argued that “the survival of the Eurozone is vital if the original dream of a united Europe is to be fulfilled.”

Irrespective of the fate of the Euro, the EU faces increasing challenges. Former Czech President Vaclav Klaus made himself unpopular in Brussels for criticizing the EU’s “democratic deficit.” Polls indicated that majorities in half of the EU members would have rejected the Lisbon Treaty, but it was never put to a vote, other than in Ireland. In part because of the lack of popular accountability, electoral opposition to Brussels is exploding.

Euroskeptic parties polled well in last year’s European Parliament elections. These groups are playing an ever greater role in national contests as well. UKIP could draw from both the Conservative and Labor Parties in the May elections. AfG barely missed entering the Bundestag in 2013 and has begun to break into state parliaments. France’s presidential elections are two years away, but polls place the National Front’s Marine Le Pen ahead of her establishment opponents. She termed the Greek election a “victory for the people against European oligarchy” and a “monstrous democratic slap … administered to the European Union.” Populist parties have prospered in Denmark, Netherlands and Sweden.

Even officials from more establishment parties now believe that Bulgaria and Romania were inducted too early and oppose expanding the EU to Turkey. London wants to roll back some of the EU’s signature policies, such as free migration within. If Tsipras delivers on his promise that “Democracy will return to Greece,” popular opposition to the EU as well as Euro could swell elsewhere.

Alexis Tsipras and Syriza have delivered an electoral earthquake. Everything could work out for Greece, the Euro and the EU. But it’s not likely. Still, even if Syriza’s economic nostrums fail, its electoral victory may end up reinvigorating popular sovereignty and accountability throughout Europe. That could make the radical party’s victory worthwhile.

Doug Bandow is a Senior Fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author of several books, including Foreign Follies: America’s New Global Empire (Xulon).

Image: Flickr/Cédric Puisney