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The economics of what is happening in Greece, in Germany, and in Europe generally right now are critical, but really a matter for someone else to write about. My speciality is international politics, and while international economics plays an increasingly important role in that domain, economic matters are not the same as political matters.
For example, considering the Greece crisis in economic terms alone presents a clear problem with an equally clear solution. There is a debtor, a number of creditors, and the latter are realizing that they will never see a return on the money they lent the former. There are a couple of options, none of which are really fantastic for both sides at once, but the creditors hold the power and the debtor will accept what they are told.
But analyze the same case politically and there is a far more complex game in motion.
For one, the complicating factor of the very idea of the European Union and the Eurozone is at the front of mind of every negotiator at the table. To be very clear, the introduction of the Euro was a political move, not an economic one. Keeping the Eurozone together or allowing the weaker parts of the Eurozone to exit when they drag the rest of the common market down is a political problem, not solely an economic one. If the Eurozone project falls apart then confidence in the wider Union idea will be shaken, and the political elites who drive the EU project will be weaker as a result.
For another, there is the political problem of Russia. After recently signing an agreement with Athens with regards to a gas pipeline, Moscow is attempting to make the Greek problem a Russian problem for the EU. This deal was less about providing Greece with cash or longer term stability with which to address their structural problems and more about Russia taking advantage of a crack in the EU’s anti-Russian wall. Vladimir Putin doesn’t have a lot of cash to splash around with the crash of international energy prices, but what he does have he can spend strategically to throw the EU off balance - just as he has here.
Consider, too, the other political problem that is facing Europe at this moment: waves of migration from North Africa. While the attention is largely on the migrants arriving in Italy, Greece, too, is welcoming many migrants from North Africa and the issue of exactly what to do with these migrants is pressing on Brussels, Paris, London, and Berlin. As Greece implodes, the migrants there will head north and west, and Greece’s political problem with become Germany, France, and Britain’s political problem. This, too, is in the front of the minds of negotiators knowing that while a Greek reset might be best for all, the wave of migrants departing Greece for the rest of Europe means excising the Greek problem fully is impossible.
There exists, too, a political problem when it comes to the notion of a European identity. This political dream that has been pushed for decades by Brussels and the political elites in Europe has quickly come undone under the pressure of the Greek crisis. The idea that we are all Europeans is clearly not the same as all French being French or all Germans being German. Despite decades of integration, regular elections for a continental parliament, a flag, an anthem, and all the trappings of a state, the European Union is quick to split into its national actors when a crisis in one area emerges. The essential weakness of the idea of a pan European identity is revealed and the political union takes a beating with every passing day of negotiations. We are not European, we are just people who happen to live in Europe and sometimes do things together.
The politics of the Greek crisis, then, are what make the crisis all the more deep, all the more troubling, and all the more important for Europe to solve in a positive way. While it is surely a political crisis brought on by some proximate economic problems, the political issues run deeper, and cultural challenges are significant, and the long term damage to the European Union - as an institution, as an idea, indeed existentially - could be great if it is mishandled further.
There is great opportunity and great risk facing Europe in these dark days of Greek crisis. Whether the end result will be continued darkness or an emergence, eventually, into the light will depend on how the politics are handled, and not just the economics.
Dylan Kissane blogs daily at The Gettysburg Blog on international politics, security, elections, and public policy.