COMMENT

The storm that lies ahead

By Alexis Papachelas

There was a time when I thought I was living in a slightly boring country during a rather bland period of history without crises, big surprises or major disasters. I am not so sure any more.

What I do know is that the Greek condition is in part a symptom of the tectonic shifts that are taking place and that are redefining Europe’s position in the world, and perhaps even the West’s general position in the greater scheme of things.

Europe needs to become more dynamic and less complacent if it wants to survive in the battle of global competition. International capital is fast fleeing the continent as a whole, be it in the form of loans or in that of investment.

The Northern European elite believes that the rest of Europe needs to adopt its economic model in order to survive. But economic planning is one thing for a country like China and quite another for Europe, a complex, maybe even dysfunctional collection of democracies.

Take Italy, for example. The European elite’s plan for the turnaround of the countries of the south was based on the idea that Italy would have a coalition government of center-left or the serious center-right parties led by Mario Monti. Enter Silvio Berlusconi, who started poking fun, making promises and bashing the Germans. The elite’s plan has collapsed and Berlusconi might now emerge as the key player in future developments in Italy.

What would this mean? It could mean that the Italian spreads will skyrocket, deepening the debt crisis and even challenging the monetary union in Italy and other countries in Europe’s south. We will certainly not get bored over the next few weeks watching Berlin and Rome wrangle it out.

What the Berlusconi case shows us, however, is that there is much in Europe we should be concerned about. The distance between the continent’s elite and its people is widening dangerously and growing unrest may have very unpredictable consequences. Cultural and other rifts are also deepening, making any long-term planning extremely difficult due to the unpredictable nature of the situation. Meanwhile, Europe is faced with the notorious “markets,” key players in developments that don’t have the patience either for the fine act of achieving political balance or for any hesitation over the implementation of structural reforms.

With all these different and important factors at play, I am starting to think that what we are experiencing in Greece today may just be a herald of the storm that lies ahead for Europe as a whole.

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