September 17, 2012
Few days ago Greece was again at the centre of criticism as depreciating comments over its future in Eurozone were thriving in European media. Especially the German media were quite sharp in their expression forgetting that Germany was in a similar position a decade or more ago.
In 1996 Germany imposed the Stability and Growth Pact and two years later Spiegel revealed a confidential message to Helmut Kohl from his financial advisory group that was underlying the continuing increase of the German public debt. The amount of debt was ready to provoke a legal issue as the Treaty of Maastricht provided a security-and-rescue clause only when there were considerable signs that the debt could be decreased.
Chancellor Helmut Kohl and his Minister of Finance were advocating that Germany’s debt should be treated with “understanding” as the country was dealing with the first steps of re-unification and that the debt was own to this event. According to Spiegel, this “understanding” was unanimously accepted by the European Commission and the European member-states.
Nevertheless, the debt issues of member-states did not end during the transitional period of entering the Eurozone, in 1999 and 2000. After 2000 many member-states were affronting problems with the strict implementation of the Stability Pact as the threshold of 3% of public debt in reference with GDP was never really considered as an achievable goal, even for the so-called robust economies of Eurozone, like Germany, France and Italy.
At that time Germany was also faced with increasing rates of unemployment, zero-level growth and a rising pace of its public debt. In 2003, Chancellor Gerhard Schröder started a big rally in order to convince member-states and the European Commission that debt clauses of the Stability Pact should be revisited and smoothed down so that they can be attainable from each member-state. His efforts came to an end with France being at his side. Reportages of that era were equally stressing out some internal correspondence between France and Germany dealing with this issue and the very essence of this process was that the regulations of the Stability Pact should change and be adapted to the German needs. For one more time, Germany had achieved to bring European austerity politics into its size and needs.
This is a story that ex-Chancellor Schröder remembers well in his effort to save Germany from stagnation and keep Eurozone alive. Yet, alike her predecessors, Merkel is now attached to the doctrine that only the big states of Eurozone have the right to violate treaties and adapt them to their own national interests. In this respect, what is Greece demanding nowadays? Nothing more than what Germany achieved in 2005, which is the smoothing of austerity regulations of the Stability Pact or even the enlargement of the debt regulation period before extreme poverty comes to sweep Greek society.
The two previous years Greek citizens were courageously enduring big sacrifices for deb regulation. In 2009 public debt rate was reaching 36,6 billions euro whereas in the 2011 it was decreased to 19,6. Surely it has to decrease more, but not through further cuts against low-paid employees and pensioners.
It is a common belief that powerful states overreach minor ones, but here, in the case of Eurozone, I am still convinced that there are some ethical values of equality left. Because the dimantling of Greece is the dismantling of Eurozone.Dimitris Rapidis