Der Spiegel: What do Greece and Ukraine have in common?

13:34, 11 February 2015
Politics
318 0

Both intersecting crisis are incredibly dangerous, each on its own and when taken jointly, and Germany playing a role in both.

REUTERS

The Greek debt crisis and civil war in Ukraine are both examples of Russian influence in the European continent. If the EU fails to support Athens, Putin will be ready to do that, Wolfgang Munchau writes in his article "What do Greece and Ukraine have in common?" published on the Web site of the German newspaper Der Spiegel.

The two tragedies are unfolding simultaneously, reflecting European weakness. Greece is on the way to exiting the eurozone, while in Ukraine Russian President Vladimir Putin is meddling in the domestic affairs of the sovereign state. The two stories are intersecting.

If Greece is to leave the eurozone any time in the future, it should not be a surprise that Russia may offer financial aid to the country. Thus, the Council of Europe would no longer be able to count on Greece as an ally, while Putin would ensure that his interests are represented in Brussels.

The policies of expectations and "brooding" have turned a limited-scale debt crisis caused by a mediocre government in a not quite mediocre country into a pan-European economic crisis. European economic crisis management has led to the fact that the Europeans do not trust themselves in the political sphere, thus making it easier for Putin to set European states up against each other.

Partial debt relief as the right solution

The appropriate solution, from a strategic point of view, would have been partial debt relief - and not only for Greece. But that would have been difficult to do, especially for Germany. But the crisis would have been over, with the banking sector shrinking but growth being stimulated.

REUTERS

If the same determination had been demonstrated with respect to Russian aggression against Ukraine initially, by applying tough sanctions, by now the Russian economy would have hit rock bottom. A total financial embargo, in combination with the decline in oil prices, might have made it harder for Putin to ensure funding for his proxy war. Military support for the Ukrainian government from Europe and the United States would have further raised the cost of such war for Putin.

Such decisive actions would of course have been unpopular, but they would have prevented the worst. One of major lessons from the history of the 20th century is that appeasement leads to exactly the opposite outcome.

Sharing out blame and responsibility

Obviously, Germany cannot be held responsible for all the mistakes made. Chancellor Angela Merkel was among those in the European Council, who supported sanctions against Russia. France and Italy were reluctant to accept this policy. Now both countries advocate lifting the sanctions in the near future.

REUTERS

As for the European crisis, blame and responsibility also have to be shared out in equal measure. The crisis in Greece has resulted from internal political mismanagement by the Greeks themselves. The government of former Prime Minister Antonis Samaras pursued a program that proved to be ineffective. He constantly made promises that he could not or did not want to deliver, while the current Greek government is behaving as if it were not intending to find a solution at all.

The analysis of a new Greek Finance Minister Janis Varoufakis is nothing but correct. His country is insolvent - too much debt, debt relief is inevitable. He was absolutely right when he said: Germany would have to understand this situation, since after the World War II the Federal Republic itself was partially forgiven the debt.

Greece’s exit from the eurozone can now be prevented only if both sides are willing to compromise on those issues they now vehemently debate. The economic consequences of such exit are underestimated by all parties. Yet some players view such outcome even as a more convenient solution.

Had it been possible to prevent such scenario, there may not have been the split in the eurozone, and in the whole of Europe. 

If you see a spelling error on our site, select it and press Ctrl+Enter