Greece: Lying will kill the euro
9 May 2011
That’s not the way to save the euro, writes the Süddeutsche Zeitung. With their secretive meeting on the Greek crisis, EU finance ministers have gambled away the last confidence of EU citizens in their governments. This must have consequences.
Rarely does one see politicians acting so irresponsibly as last Friday evening. In Berlin, Brussels, Paris, Rome and Luxembourg there was silence, deception and even bald-faced lies. And all that just to keep secret a meeting of finance ministers at which – as declared later – only a few opinions were exchanged about Greece sliding ever deeper into crisis, but no decisions were taken.
Within just a few hours the governments of the euro countries succeeded in gambling away the last vestiges of trust that the public still holds in their rescue operations. Who in future is to believe that the Greeks do not want to leave the currency union under any circumstances, when the chairman of the Euro Group, Luxembourg’s Prime Minister Jean-Claude Juncker, heads up the deception? First, he denies in writing that the finance ministers even met in Luxembourg. Then he publicly swears loyalty to the Greeks. Finally, it comes out that he had personally invited his colleagues.
The public feels cheated
Any reasonably interested citizens will now be asking themselves, with emotions ranging between surprise and anger, how dramatic the situation really is in Greece. Is the country, despite all the help and assurances to the contrary, on the verge of bankruptcy? This would mean that yet another promise from the leaders would dissolve into thin air: that the Greeks will pay back all the loans they have received from their partners, with interest and compound interest. If they fail to pay up, the taxpayer is definitely on the hook.
This is not the first time the public has felt cheated. A year ago, when the Greek debt crisis was getting ever more threatening and it looked as if Athens had all the help from outside it needed, the officials in Berlin, Brussels and other capitals denied the precariousness of the situation. Then, at the last second, they handed over 110 billion euros in loans. The taxpayers rubbed their eyes.
The bail-out of Ireland followed the same scenario. First, the heavyweight euro countries denied that the government in Dublin could no longer handle the economy on its own. But suddenly a rescue package was being negotiated. Finally, along came Portugal. No, the country was cutting back, bringing in reforms; the situation was tense but hopeful, the word went round once again. Then it was announced that Lisbon could not even pay the salaries of its civil servants – and the country fled for the safety of the bail-out bucket.
Granted, in all fairness, the euro countries – along with the European Central Bank and the European Commission – may have been overwhelmed by events, at least at the start of the dramatic debt crisis. Perhaps, too, they actually believed for a long time that the states would pull through without help. But things are different this time. On Friday, for the first time, the public was demonstrably and deliberately lied to. Two days later neither an explanation nor an excuse is forthcoming. The responsible officials are keeping quiet.
The deceit we witnessed must have consequences
If they get away with it, the outlook for the monetary union is, frankly, dire. The deception encourages all those who would prefer to abolish the euro anyway. And it has stoked the bad dreams of the taxpayers, who now doubt that they will ever get back the money they loaned out.
The politicians may ignore the sensitivities of the public, but they won’t slip past the markets that easily. Even as the communications muddle was unfolding on Friday evening the euro fell by two cents against the dollar. Investors fled into American bonds. One thing is certain: if trust is to return, the deceit we witnessed on Friday must have consequences.
Translated from the German by Anton Baer