Democrat May-June 2012 (Number 129)
Germany's plans for Greece*
Berlin has failed to force Athens into subordination by threatening to withdraw the euro. Berlin categorically rejects the option of retracting the austerity programme and replacing it with a stimulus policy, as advised by leading economists world wide, even though Greece leaving the eurozone threatens to push the currency into an abyss.
Protests by trade unionists in Athens against austerity policies
Berlin has failed to force Athens into subordination by threatening to withdraw the euro. Berlin categorically rejects the option of retracting the austerity programme and replacing it with a stimulus policy, as advised by leading economists world wide, even though Greece leaving the eurozone threatens to push the currency into an abyss.
A Last Chance
After attempts to form a government in Greece failed it appears that in the June 17 election those forces will win a majority that are strictly opposed to austerity. Even with three parties willing to implement the austerity programme they failed to form a government and polls predict their defeat. The fact that a majority in the Greek population would like to keep the Euro, is seen in Berlin and Brussels as a last chance to achieve a change in public opinion. Already before the announcement of new elections, German Finance Minister Wolfgang Schäuble declared the Euro zone could easily cope with Greece's withdrawal. EU Trade Commissioner Karel De Gucht confirmed the EU Commission and European Central Bank (ECB) are preparing for Greece's withdrawal.
Euro Dusk
Berlin is rebuffing every deviation from the severe austerity policy, ruining Greece - in spite of the fact that this will accelerate the collapse of the entire eurozone. A few days ago, the economist and Nobel laureate Paul Krugman, was not the first to describe such a scenario. He said soon, "most likely, next month," Greece will exit the Euro zone. Immediately thereafter, a comprehensive capital flight can be expected to Germany - at least from Spain and Italy, out of fear of also these two countries' economic collapse. This would necessitate drastic measures - limitations of money transfer or new support measures for Spanish and Italian banks. In the long run, however, support particularly for the Spanish economy with stimulus programmes cannot be avoided. This would mean a strategy change for combating the crisis that Berlin from the very beginning has been trying to avoid at all costs. "Germany has the choice," explains Krugman, accept the change of course or "the end of the Euro... imminent in ...months, not years."
Protectorate
Sectors of the German elite, which refuse to consider this change by Krugman and numerous other experts outside Germany, are now publicly debating scenarios involving the use of force. In a newspaper interview in early May, the director of the prominent Hamburg Institute of International Economics, Thomas Straubhaar, called for establishing a protectorate in Greece - "regardless of the outcome of the elections." The country is a "failed state," he says, which is unable to raise itself "to a new start" under "its own steam." Athens needs "help in establishing viable state structures." It, therefore, must be transformed into "a European protectorate." "The EU must do it," affirms Straubhaar. The EU "would have to help Greece modernize its institutions at every level, particularly with administrative staff, tax experts, and tax inspectors." However, re-founding Greece would demand "intuition" to "overcome national pride, conceit, and the resistance of interest groups." This is referring to a sovereign democracy, a German ally in the EU and NATO.
Putsch
In the meantime, there is discussion of a putsch in Athens. Greece threatens to sink into complete chaos, warned Daniel Cohn-Bendit MEP (French Green Party). He explained that it is impossible to avoid extensive foreign interference. "If you leave the Greeks to muddle through alone, you are risking a military putsch." Another commentator warned "In the Greek situation, the worst case would be a reversion to a dictatorship". "This scenario becomes more probable as instability grows." In reference to the links between a possible dictatorship and Berlin's austerity dictate, the commentator writes, "already today, it seems as though Merkel's austerity policy can, at best, be imposed on the streets of Athens by force of arms." On 18 May, a leading German daily discussed the issue of dispatching troops to Greece. (Frankfurter Allgemeine Zeitung)
____________________
*Edited piece by German-Foreign-Policy Group of journalists