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In the election billed as a make-or-break moment for the European Union, the pro-bailout faction in Greece has carried the day. Antonis Samaras and the conservative, pro-bailout New Democracy party have won 30.1 percent of the vote, giving them 130 of the 300 seats in the Greek Parliament. The anti-bailout Syriza party led by Alexis Tsipras won 26.5 percent and 70 seats, and the pro-bailout Socialist PASOK party, led by Evangelos Venizelos, ran third with 12.6 percent of the vote and 34 seats. “The Greek people today voted for Greece to remain on its European path and in the eurozone,” said New Democracy leader Antonis Samaras. “(Voters chose) policies that will bring jobs, growth, justice and security.”
Will they? Barring major changes in the way Greece conducts its affairs, the answer is no. The latest bailout of $218.6 billion, courtesy of the European Union and the International Monetary Fund (IMF), will do little more than forestall the inevitable in a country beset by five years of recession, 22 percent unemployment, and thousands of private sector businesses shutting down. And even as Mr. Samaras vows to maintain the austerity measures necessary to keep the funds flowing, he promises to seek a better deal than the one currently in place. This is due in large part to more lenient terms won by Spain’s insolvent banks when they received their very own $125 billion bailout only last week.
In other words, Greece is little more than a symbol of the far larger disease that afflicts the European Union. That disease can be reduced to a simple phrase: socialist-inspired hubris. It is a hubris so deep and overwhelming that common sense cannot compete with it. There is no other way to describe a union that was created, based on two fundamentally flawed ideas, namely that industriousness and slackness are inconsequential, and that bureaucracy supersedes culture.
The idiocy of the first idea can be reduced to a simple concept. Every other consideration notwithstanding, there is finite limit on how far nose-to-the-grindstone Germans, who retire at 67 years of age, will go to underwrite devil-may-care Greeks, who retire at 61. That is not to say that Germans will immediately abandon the Greeks, as Peter Tchir, with TF Market Advisors explains. “Now that Germany and others started looking at how to manage a Greek exit, they have realized some scenarios are pretty disastrous and will go out of their way now to avoid those. There is just too much risk–that it quickly spreads to Spain and Italy, especially if the ECB (European Central Bank) has to take massive write-downs,” he contended.
The idiocy of the second idea is just as damaging. The original vision behind the creation of the EU was a “United States of Europe” that would mitigate the conditions that produced two World Wars. Yet while America is comprised of fifty separate states under a federal umbrella, every one of those states is American, culturally speaking. The EU on the other hand, is a conglomeration of sovereign nations, each with its own cultural imperatives and, as Germany and Greece illustrate so vividly, markedly different visions of both entitlement and fiscal responsibility.
Where Europe got it spectacularly wrong was setting up a common currency without first setting up a political union. Thus, the bailout conditions imposed on Greece by the EU, the European Central Bank and the IMF that many Greeks see as overly onerous to begin with, are further exacerbated by the reality that those same Greeks view such “austerity” as an assault on their national sovereignty. British writer Nigel Gardiner of The Telegraph illuminates the current consequences of this cart-before-the-horse approach, within the context of last week’s announcement by European Commission President Jose Manuel Barroso that the EU must take “a very deep step” towards further integration:
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