Well, it is a little over two months since I commented on the Greek financial crisis. The financial part in this crisis is on a slippery slope that there is not much to talk about. Confidence in Greece from the point of view of the markets is eroding. One of the three rating agencies has given Greek bonds the "junk" status. The other two are one notch away. Other countries like Portugal and Spain have also lost in their ratings.
More interesting is perhaps what is happening with Europe. We have two elections coming that both might be important for the future development. One in Britain May 6 and one in Germany May 9. The British election might be important for the outcome of the German one because it might go in an eurosceptic direction if the Tories win. Will Germany say good bye to Greece from the Eurozone then?
Some people are actually already saying that Greece will default on their loans. Investors will not get all their money back. They talk about a Lehman Brother's of Europe. What is happening in Europe? The European welfare model is falling apart or are we now to believe that only north of Europe can function economically in the present global environment?
Most people are not economists, I am one of them, but economists have not performed as of late. They are as bewildered as most of us. The funny thing is that in the middle of all this in Europe there exists a very strong voice for increasing expenses further to account for the environment. With one country dropping off after the other, is this something that Europeans are going to afford?
From the press of the latest 2 month it is clear that Germany is in charge. It is the largest country in the EU and they did reasonably well through the financial crisis. It is Wolfgang Schäuble that sits with Jean-Claude Trichet of the ECB and Domenique Strauss-Kahn of the IMF. What is it we Europeans want to hear from our leader, ie, the leader with most liberty at this point, Angela Merkel, at a time like this?
Well, maybe the Germans want to mind their own business from now on? They have paid a fortune into East Germany and know first hand how difficult it is to germanize or europeanize a country both economically and inspiration wise. The idea of a federal Europe is dead and buried according to most accounts. Maybe they think that we can make it alone in a globalized world but it is not possible to carry any dead weight?
That is probably the core of the matter. Is the average EU strong enough. A two speed Europe is already here. But will a two speed Europe really function? It is anathema to the welfare state model where the weak are helped along by the strong. My feeling is that Europe is at cross-roads. It is now or never.
The EEAS or European External Action Service headed by the high representative Lady Ashton, 7,000 able men and women, are not even in play yet to take care of EU foreign business. We were going to have a voice in the world but we just have to dump some of the ballast first? Everything that is not getting our common act together is going to look rather silly by observers in the world at large.