Greece’s Debt Crisis and the End of the “European Dream”?

Greece's current debt crisis, according to Jacque Attali, one of the founders of the European Bank for Reconstruction and Development, is "la minute de vérité" for the whole of Europe. This is because Greece's debt crisis has threatened the sustainability of the Euro as the unified currency of the European Union.

After World War II ended, political unification was the common dream of Europe, the biggest execution ground of the two world wars. And since the establishment of the Franco-German Coal and Steel Production in 1950, economic cooperation has always been the foundation of this political unification.* The induction of the Euro and the founding of the Eurozone was an important milestone for the realization of this "European Dream." The threat of Greece's debt crisis to the Euro could possibly be a historic setback or even a reversal for the unification process of Europe. This is reflected in a related commentary in a recent issue of Le Figaro, which carried the headline "Le rêve europeen est passé" ("The European dream is passing").

In the final analysis, Greece's debt crisis is the result of an E.U. member nation using up tomorrow's resources today for many years in its financial expenditures and accumulating its deficits, which led to the nation facing the prospect of not being able to repay its "sovereign debts" and imploring other E.U. members to help with its repayment.

Just like the Washington Post analyzed, Europe's PIGS (the acronym of Portugal, Italy, Greece and Spain), which are facing similar financial debts, have been competing with one another in being unprecedentedly extravagant in their public fiscal expenditures and personal consumption levels, and have accumulated great debts. They are facing bankruptcy under the international economic and financial crisis today. On the other hand, people in and out of politics in Germany, the strongest E.U. economy and also the most important "savior" for Greece and other nations, are also known for being diligent and thrifty. In contrast to the PIGS, Germans can be said to be economical in their everyday spending, and their rate of savings is the highest in Europe. In 2005, even the Social Democratic Party, led by former President Gerhard Schroeder, risked incurring the wrath of left-wing voters by cutting down on many social welfare expenses, which became an important factor in him losing the election that year.

Against such a backdrop, the German magazine Der Spiegel reported that nearly 70 percent of the German public are against Germany and the European Union rescuing Greece from the debt crisis. The paradox here, however, is that, once the Greek government is unable to repay its sovereign debt, it will undoubtedly trigger a new cycle of international financial crisis, causing the remaining three PIGS nations to follow in Greece's footsteps. The chain reactions thereafter will eventually cause the disintegration of the Euro and the Eurozone, thus becoming the great reversal of the European unification process.

Calls for "Giving up the European Union Dream" appearing in France and Germany

Such a prospect, however, represents many of the European public's intentions, especially in France and Germany, the two leading nations in the European Union. The commentary in Le Figaro, mentioned earlier, pointed out that the current leading thought is to "give up the European dream and return to national sovereignty."


The public discourse in Germany made a relevant point that the most important cause of the current E.U. financial crisis was that the integration process led by France and Germany made a comprehensive expansion too soon before its necessary deepening. What caused the "Big Bang" was Washington's "sand-mixing" strategy after the disintegration of the Soviet and Eastern European blocs, causing the expanded European Union to be in a lax situation where they were without a leader.

In my view, however, the other significant reason for the "European dream" being outdated is that the welfare society is difficult to sustain under the wave of financial globalization, and almost all European nations are facing a situation in which their fiscal welfare expenditure is continually exceeding their income. Such a crisis has finally erupted in Greece, the nation that has had a strong welfare program but lacked self-control in government spending.

The French paper Le Monde recently published a commentary by a scholar from the Sorbonne University in Paris who thinks Greece's debt crisis is a plot against "European social policies." Without taking the left wing doctrine into consideration here, such a view fully exposed the deep crisis within the European social democratic institution.

Strong evidence for this reality is that, while the 2008 and 2009 global economic and financial crises exposed the current capitalist market economy's weaknesses, given increasing unemployment and increases in the gap between the rich and the poor, not only did the majority of socialist parties in Europe not receive political benefits, but their situations became worse than ever. Aside from Italy, the PIGS nations bearing the brunt of the current debt crisis are all governed by socialist parties.

The plight of the European socialist and social democratic parties made me think of the knowledgeable jabs the New York Times' Thomas Friedman made a few years ago: "It was Chinese capitalism that put an end to European socialism." In my opinion, such a development is an important motivation for the European intellectuals' and public discourse's increasing coldness and enmity toward Beijing on issues ranging from politics and economy to environmental protection.

From the perspective of real world politics, the European Union's internal and external crises have caused Europe's standing in the international political arena to decline rapidly. The United States Secretary of Defense Robert Gates openly criticized "Europe's demilitarization" a few days ago, saying that this has become "an impediment to achieving real security and lasting peace in the 21st century." Under the social welfare expenditure's strained financial circumstances, however, Gates' request for the European nations to substantially increase their military expenditures is asking for the impossible.

More evidence is that Obama, the "dream president" in Europe's eyes, decided in February not to attend the U.S.-E.U. Summit to be held in Spain in May, causing major disappointment for European politicians and the public alike. Democratic Alliance leader Francois Bayrou, the new force that emerged during the last French presidential election, recently jabbed, "now Europeans should not dream of being on equal grounds with the Americans. We can only be compared to the Koreans." This is the best annotation of Obama's "contempt for Europe."

*Editor's note: The Franco-German Coal and Steel Production is referred to as the European Coal and Steel Community, which was first proposed in 1950 and ratified in 1952. It included Belgium, Germany, France, Italy, Luxembourg and the Netherlands.