As I write this, the second bailout of 130 billion Euros for Greece is on hold pending agreement between the coalition government in Athens on new austerity measures. While we wait on the leadership to make a decision, I reiterate my belief that sooner, rather than later, Greece will default and may be forced to leave the Euro and/or the European Union. But for now, let’s look at the issue of national sovereignty as it relates to the Greeks and what the EU fathers are asking of Greece.
Last week I mentioned that the EU fathers (particularly the Germans) had floated the idea that Greece surrender some of its sovereignty to the EU in order to continue receiving bailout money to keep them afloat and to keep them from default. The breadth of the proposal floated by the Germans is astonishing. It begins right out of the gate stating that Greece must commit itself and implement elements and then, only when implemented, can it receive funds. It states:
“To improve compliance in the 2nd programme, the new MoU will have to contain two innovative institutional elements on which Greece will have to commit itself. They will become further prior actions for the second programme. Only if and when they are implemented, the new programme can commence:”
The heart and soul of the proposal reads like a kidnapper’s demands:
“Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its comittments...If a future tranche is not disbursed, Greece cannot threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement.”
“Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control. He must have the power a) to implement a centralized reporting and surveillance system covering all major blocks of expenditure in the Greek budget, b) to veto decisions not in line with the budgetary targets set by the Troika and c) will be tasked to ensure compliance with the above mentioned rule to prioritize debt service.”
As I noted last week, Greece must commit itself to service its debt first, and then pay for everything else a government pays for with tax revenue. And this must be enshrined in law. And then the Greeks must commit to have an overlord, a pasha or a bey, appointed by the EU fathers, rule over its budget with extensive power.
No country in its right mind would agree to such a thing, nor should they. While we all might find it easy to cheer for this, consider: if the EU can force one country into this scheme, what can’t it do? And if Macedonia should ever join the EU, just remember that it could happen to you. (First they come for your budget and sovereignty. Then they come for your children).
Now let’s look at the Greek response. Deputy Prime Minister and Minister of Finance Evangelos Venizelos issued a statement hours after the above came out. It stated, in part:
“The people of Greece is fully aware of the extent of assistance the country receives from its institutional partners in Europe. With their sacrifices, Greeks will fulfill their historical obligation to take Greece out of the deep fiscal, social and developmental crisis, and will take and implement tough, yet necessary, decisions.
On the other hand, our partners do know that European integration is based on the institutional parity of member states and the respect of their national identity and dignity. This fundamental principle fully applies for countries that go through periods of crisis and adjustment and are in need of their partners’ assistance for the benefit of the whole of Europe and the Euro Area in particular.”
The UK’s Independent noted that “Anna Diamantopoulo, the Greek Education Minister, called the German plan ‘the product of a sick imagination’. Pantelis Kapsis, a Greek government spokesman, insisted there was no need for such controls. ‘It’s a matter of national sovereignty,’ he said.”
Venizelos writes about “national identity and dignity” and Kapsis says it is a “matter of national sovereignty.” Both are correct: Greece would be ceding its national identity and dignity and sovereignty by giving the EU the powers it wants. And Greece should not surrender any of it. And yet both the EU and Greece are asking Macedonia to surrender its national identity and dignity and sovereignty on the name issue. Greece cannot have it both ways. Neither can the EU. Live free or die.