Do We Need More or Less Europe to Escape the Crisis, Chapter One: Is Europe to blame for the Greek crisis?

Austerity measures have created hardships for many Greeks. And this is not some abstract concept, like the general standard of living having fallen; many people have lost their jobs, their clientele, they cannot afford pay their rents, their social security contributions, their taxes, in some cases they are even unable to bring food to their families' table. A lot of those people were in no way beneficiaries of the excesses of the period leading to the crisis, so they fail to grasp how they turned out to be victims.

Victimization needs a scapegoat, of course. In a country where nationalism is almost official State policy, the finger could very easily be pointed at foreigners. The bail-out terms imposed by Greece's creditors, including the States of the Eurozone, but mostly these terms' purported implementation by the governments through horizontal slashing of salaries and pensions and without hurting or in any way affecting privileges of several groups with special ties to the political system, led to accusations against other European nations. This anger was very convenient for a large part of the political system, that had actually brought the Greek economy to its knees through excessive spending and borrowing and was only to happy to shift the blame elsewhere.

At the same time, a liberal criticism against the Eurozone emerged. Its aim was both on the bail-out (which was all but strictly forbidden in the Treaties), and the cheap credit and the flow of European money Greece received since adopting the Euro. The influx of a lot of money gave successive administrations the opportunity to exercise ever-increasing control over the economy. This hold would presumably cease in the event of an abrupt end to the flow of cash, since the government would have nothing to distribute. Since the bail-out brought in even more money, the criticism goes, a golden opportunity was lost for a drastic severance of the ties between government and the economy. For these calamities Europe was to be blamed.

This criticism is focused on the means, rather than the actors themselves. It works under the assumption that the opportunities and the potential afforded by cheap credit could result in nothing but a bloated public sector. It is almost like blaming guns for murders or cars for road accidents. Moreover, it ignores previous practice, when Greece still had a national currency: in the place of cheap credit, the government would typically resort to printing inflationary money to distribute.

Brought to its extremes, the argument against Greece enjoying the benefits of a steady currency (through its association with the European Union and the Eurozone) would lead to an absurdum, implying that sound fiscal policies would have to be avoided at all times, since an administration could always take advantage of a surplus in order to allocate it among its supporters, special interests, etc. It also avoids the actual point of political participation, which is necessary in order to achieve the purpose of reducing the extent of government intervention in the economy.

Yet, there are some things to be said, as far as the role of the european institutions is concerned. The Commission and the European Central Bank were supposed to exercise oversight on the fiscal and banking policies of the eurozone members, but failed to to so effectively. Eurostat very easily accepted the false data provided by the greek statistical authority. Up and until late 2009 everyone assumed that the Greek economy was emerging from the global financial crisis of 2008 unscathed, maybe even stronger, as a result of its low exposability to toxic bonds. But the main responsibility still rested with the side providing the false data, and that would be the Greek authorities.

In conclusion, the majority of blame for the crisis Greece is currently facing must fall on the domestic political system. The question to be answered in the next and final installment on Europe and the Greek crisis that follows is how European institutions can, or are required to be, part of the remedy.