This editorial is also published in Kathimerini.
The most important result of last week’s summit in Brussels was perhaps not so much the writedown of Greece’s debt but the fact that the European Union is changing and creating structures that will allow other countries to help fund the euro’s rescue. A few hours after the summit, French President Nicolas Sarkozy telephoned his Chinese counterpart Hu Jintao and invited China to participate in the fund. Brazil and Russia have also shown interest in such an investment.
If the plan goes ahead, it will achieve several aims: The European Financial Stability Facility (EFSF) will be greatly strengthened (to an estimated 1.4 trillion euros) so that any eurozone members facing difficulty in borrowing will not be left to the markets’ mercy; this will prevent the crisis from spreading from country to country, and, in addition, will support Europe’s economy, allowing the developing giants of the global economy to invest in it and at the same time protect their trade relations. It is probably no coincidence that China’s interest comes shortly after the publication of statistics showing that last September China’s trade with Europe increased only by 9 percent, compared to 22 percent a year earlier. The United States has also been pressing European leaders to take radical measures so as to prevent the crisis from spreading throughout the global financial system.
So everyone has a reason to prop up Greece: By supporting our country they serve their own interests. Only under such circumstances can a weak country achieve great things, in this case, national reconstruction — as long as it does something to help itself. And this is where last Thursday’s decisions are so dangerous for us: Greece is now one step away from being evicted from the eurozone. If it does not do what it needs to do, it will be left to its fate.
Our partners’ provision of a new 109-billion-euro loan, the writedown of Greece’s debt and the fortifying of European banks through recapitalization all serve to isolate Greece. The Europeans have built a wall which, if necessary, will lead to Greece’s eviction without the threat of further surprises for the European economy. They have handed Greece enough money to try to save itself and are also providing a framework of strict supervision, in what truly seems like a last-gasp effort to save the country and the money they have lent it. On the part of the possible new investors in Europe’s fund, the Chinese government will look very closely at the security of its money and, reports say, could invest up to 100 billion euros of its reserves of 3.2 trillion dollars. Brazil holds reserves of about 300 billion dollars. “Most of this is in American government bonds, with a yield of below 2 percent per year. We are losing money,” Cristovam Buarque, vice chairman of the Brazilian Senate’s foreign affairs committee, said during a recent visit to Athens. His country could invest in the EFSF. “But we have to have confidence,” he said. Clearly, no one is keen to loan money to Greece directly.
The fact that the Europeans are seeking help from China and other countries which they frequently criticize for their social and economic policies, shows that they feel forced to strengthen the EFSF so as to convince markets that they will allow no one to question their will to defend the euro. Addressing the German parliament just before the summit, Chancellor Angela Merkel placed the EFSF at the center of her country’s policy. “The whole world is watching Germany and Europe to see if we are ready and able to take up the responsibility. If the euro fails, Europe fails,” she said. The decisions of the 14th summit to focus on the crisis shows that our partners agree on the need to stop the contagion.
Greece, facing its need to change, has succeeded in changing Europe. Today we have only two options: Either we use our last chance to change our country and take our place again among our partners, or we continue to lose ourselves in secondary issues, isolated from our partners, the markets and possible creditors — and, as usual, at war with ourselves.