The Party’s Over: what next for Greece and the Euro?

The Euro Hydra

The best way to deal with the Euro?

The European Project was built from noble and well-intentioned stuff. A common market which would promote the free movement of people and goods, improve cooperation and understanding, and in turn help build barriers to future conflict.

Who wouldn’t want to buy into that?

But somewhere along that line we’ve gone off the rails. Helmut Kohl and François Mitterand (amongst others) started to have bigger dreams of federal integration too. This was the grand political project whose trojan horse was the creation of a single currency, the Euro. However even since it’s launch it has been a solution in search of a problem, and now the bad economics at its core have seen it mushroom into the dictionary definition of a boondoggle project. When adopting the Euro, the tools needed to run the divergent economies of Greece, Spain, Germany, France and Finland were transferred to Frankfurt. Initially, a sudden burst of cheap credit made everyone believe the Euro project was a winner, and a spending spree ensued. But now the poor economics of the Euro have come back to bite us, and the economic tools needed to help at least rectify some of the problems left in its wake are no longer to hand to those that need them.

So now we have a situation where Europe – which should be turning to face the great challenges of our time with a united front – is instead turning it’s back on the world to fight internal fires of it’s own making.

So what to do?

First, kill the debt. People who lend money at high risk should pay the consequences for extending credit in those circumstances. A bitter pill to swallow, but better that than creating an anger vacuum in Greece into which some genuinely crazy and scary ideas might get sucked in and take hold.

Second, kill the Euro, not just in Athens but in Europe. Battling the Euro feels like battling a Hydra – you cut off one head only to watch another two grow in it’s place. Better then to go straight for the heart. Maybe then Europe can start looking beyond it’s own navel and start tackling some of those other issues out there that need our intellectual clout and creativity to get sorted. Time to wake up and shake off that hangover. The party’s over. There’s work to be done. Europeans – and the European project itself – should and can be better than this.