Now that the consequences are manifest, it would be easy to dwell on the mistakes that got us to this point. We should not have let Greece enter the Economic and Monetary Union with falsified figures. We should not have let the debt grow so large given the country’s weak economic fundamentals. We should have forced the Greeks to establish effective fiscal and economic institutions long ago.
During the more than 10 years we have had a single currency, we could have set up a finance minister for the Union to effectively control the economic policy of each member state. European governments could have done more to ensure that the European banks shared the burden. The level of remuneration currently paid to their traders and executives surely shows they could afford it. Since innovation and growth are the pathway out of economic crisis, Europe could have developed a program to support massive investments in European industry and launch a new “Airbus” of the rail, of telecommunications, of electric cars, or of genomics. We should have kept on making brave European decisions.
For all this, alas, it is too late. If we let Greece go bankrupt, the euro will disappear. The very principle of the European Union will be challenged. Unemployment will rise again, including in Germany, which has up to now benefited from an undervalued euro. If we let Greece go bankrupt, what lies ahead is an economic and political crisis worse than that of 2008. It is therefore necessary to change our perspective. We must stop thinking of the Greek problem, and start thinking of the problem of the European Union. Solutions exist.
We are only in dire need of the political courage to implement the following: