What a fine mess we’ve found ourselves in! Following a confusing election result and the incapability of Greek politicians to manage a crisis Greece is heading for the Grexit, the exit from Euro. Spain is on the brink of financial meltdown. Hollande braves storms and thunderbolts to fly to Berlin and convince the German austerity ideologues that the ECB needs to start printing money as soon as possible. Commissioners and ministers speak in many tongues, and by that I do not mean different languages. Everyone is buying for time till July 1st when the European Stability Mechanism comes into force, but it is doubtful that the markets will wait till then. Could this be the dawn of Euro-Armageddon?
The nightmare scenario is this: Greece dances its way to a new election in mid-June, by which time money runs out. Salaries and pensions are not paid. There are bank runs and the banking system fails. People take to the streets. There are pockets of civil strife. The army is asked to intervene. Meanwhile, people in Portugal, Spain, Italy and Ireland go to their banks and ask for their money fearing (quite rightly) contagion in the banking system. The domino effect, coupled with market worry that this is worse than 2008, sends the world economy back to recession. Obama is set to lose the election as unemployment in the US begins to soar. Germany, seeing that it is no use trying to shape the unruly southerners according to her image bites the bullet and does what it always wanted since the end of WW2: go its own way. Europe is again cut in half, or in several quarters if one adds Britain pulling out of the EU, France trying to pull the south together in one last-ditch attempt to suck up to the Germans, and the Balkans tail-spinning once again into chaos.
And all that because two years ago the wise heads in Berlin and Brussels decided to make an example out of Greece, instead of acting responsibly and trying to minimize as quickly and as effectively the fallout of the relatively small (by EU size) Greek debt.
Hope is the last to die, as they say. Indeed there might still be a chance to save Europe. But that will mean Germans start thinking like the rest of us, and the rest of us start thinking like the Germans – a tough task for all concerned.
What a pity if a year from now we look back to the 1990s and the 2000s with wistful eyes, and think of them as the best two decades the world had ever had…