Europe & world

European Union: Without the South, the North loses Europe

27 July 2011
Le Temps Geneva

Beach of Lido, at Ostia, near Rome

Beach of Lido, at Ostia, near Rome

The countries of southern Europe are facing huge problems. But this no reason to neglect them or shove them towards the exit: the fate of the EU is linked to its southern countries, writes a reporter from Le Temps.

The numbers are in, and they’re pitiless. The figures from Greece – the debts of about EUR 350 billion, equivalent to 160 percent of its gross domestic product (GDP) – are a rallying call to all those, with Germany in the lead, who are out to pillory the past mismanagement and fraud (proven) engaged in by Athens.

The numbers from Portugal aren’t much better: a public debt of 126 billion euros, or 88 percent of its GDP. And Italy, bringing up the rear, is hauling a debt of about 1.8 trillion euros, or nearly 120 percent of its GDP – and what’s worse, the inefficiency of its public services has been illustrated on television screens around the world by the chaotic garbage collection in Naples. The case of Spain, let us note immediately, is different. In Madrid the authorities are facing primarily a spiral of private debt comparable to that of Ireland, where the rescue package from the EU aims to refloat the banking sector. At 680 billion euros, representing about 64 percent of GDP – against 1.65 trillion for France, or 84 percent of French GDP – Spain’s sovereign debt is now in the sights of the rating agencies.

Added to this, the critics will note, is the divided island of Cyprus. A member of the EU since 2004, the island is now in its turn calling for help after being brought low by the July 11 explosion that killed 13 people and left the main power station a heap of rubble. The cost of rebuilding and recommissioning the plant will exceed one billion euros, experts predict. The government in Nicosia, however, is already facing a steep bill of nearly 50 billion in public debt, or 71 percent of its gross domestic product. In relation to the other numbers, the one billion is insignificant indeed. And yet...

Destiny of Europe has always been bound to the Mediterranean

What to do, then, above and beyond the reforms meant to rein in spending, to bring in more tax revenues and set off on a round of massive privatisation, as is about to be pushed for in Greece? To draw drastic economic conclusions with a shrug of the shoulders is one option. Some German lawmakers have even been suggesting that Athens auction off a few sunny islands to replenish its coffers. It’s a method that, indeed, some European powers were able to fall back in the past, such as when Napoleon sold French Louisiana (covering almost the entire central and western United States of today) to the newly independent state for fifteen million U.S. dollars in May 1803 – the history behind how he financed his insatiable appetite for war.

The same Cassandras, or very nearly, are now chomping at the bit to discuss the exit of Greece from the euro area, forgetting that the Lisbon Treaty does not allow a member country to be expelled. The calculation is a simple one: to turn the single currency into a club of virtuous European countries geographically anchored in the north.

But the political reality of the continent is intractable, and the shibboleth of a quick and easy expulsion, brought up again and again by the populists on the hard right such as the Dutch Freedom Party of Geert Wilders, denies the obvious: that the destiny of Europe as a historical power has always been bound to the Mediterranean. Severing the EU from its southern borderlands would be a political contradiction, given that the strategic and economic policy issues that are played out there are crucial. And let’s not mention the colossal contribution of Greece to European thought, or the manner in which the commercial and capitalist identity of European was forged in the Mediterranean, as shown by Fernand Braudel.

Lead the poor performers of today towards maximising their performance

Speaking merely about markets, the movement of labour and today’s news: at a time when NATO planes are taking off daily from air bases in Sicily and Crete to hit the forces of Colonel Gaddafi, who can claim that the budget equation must be the sole factor behind integration? Who can argue that the "Arab Spring" may not prove to be a source of incredible vitality for the continent? The staging posts pass through Athens, Naples, Gibraltar, Barcelona and Nicosia. Berlin, which is investing so much in the Desertec solar project south of the Mediterranean, should not forget this. The Union for the Mediterranean, justified but poorly thought out by Nicolas Sarkozy, must not be shipwrecked.

Another argument, more trivial, also deserves to be debated openly. Where does Northern Europe, hand-working and virtuous, head off to on vacation as soon as the production lines at the German car manufacturers or Finland’s Nokia factories shut down? One just has to step outside in Brussels these summer days to see the endless stream of caravans bearing away Dutch voters, no doubt filled with Freedom Party voters, to France, Spain or Italy.

A fate of geography? Certainly. But this same fate also means that all countries cannot be hauled up and judged on the same carpet. Peoples and countries have neither the same destiny nor the same comparative advantages. The goal should be to lead the poor performers of today towards maximising their performance, rather than show them the exit – and here we might usefully recall that, just a few years back, the example of the Spanish boom was being lauded even in Germany. Greece has been the birthplace of billionaires graced with the most beautiful of dispositions, those traders and ship-owners who were the glory of Europe for centuries. The ships of their descendants are still plying the seas today. Without paying taxes. And therein lies the problem. A question of numbers. Merely numbers.