This morning we wake up to news that – finally – Eurozone finance ministers have agreed to bail out Greece for the second time to the tune of €130 billion.
The “aid”, as it is referred to (making Greece sound like a third world country) is conditional on the European Commission having a presence on the ground to oversee that this money is spent in the right way and is not frittered away or mismanaged.
Greece was the first of three Eurozone countries to receive a bailout and is the first to receive two. Lucky them. But throwing money at problems rarely makes them go away, and it remains to be seen:
a) whether this €130 billion is enough to shore up Greece’s finance for the long-term, bearing in mind that 2011 saw the country’s economy shrink by 7%. To be clear – this is not a recession, this is a depression.
b) Whether the Greek electorate will tolerate being told what to do by outside officials, be they from the Commission or another Eurozone country. History teaches us that, in the wake of depression, the political world can get shaken up, and parties from both sides of the political spectrum gain ground. There could be trouble ahead.
c) Whether and to what extent the northern Eurozone population will tolerate granting hand-outs to their southern neighbours with little in return.
There are other fundamental questions too, notably the precedent this sets for the Eurozone and the EU at large.
If, as seems probable, the Eurozone will continue to shore up ailing economies for the foreseeable future, to what extent will this lead the Eurozone into full fiscal coordination, with budgets not just approved in Brussels but also drawn up.
This would seem to be in the Euro’s long-term interest, but where does this leave national governments and the notion of democratic representation?
And where does it leave non-Eurozone countries in the EU? Why on earth would they want such strict oversight and, indeed, governance of their budgets, when they are not even in the same currency?
Finally – and striking at the very core of the EU – why would the non-Eurozone countries decide to stay in a currency bloc which seems condemned to bail out Member States who have been shown to be persistently unreliable and irresponsible bedfellows?
The end of the affair? Why, this is just the beginning.