The extra step

Angela Merkel finally went the extra step required by circumstances: The German chancellor gave the go-ahead for the rescue of the euro currency, and Greece, by urging an acceleration of Athens’s negotiations with the International Monetary Fund and the European Central Bank. German Foreign Minister Guido Westerwelle said, «We will protect our currency and this is in the deepest interest of every European citizen.» Europe’s power driver has risen to the challenge and Merkel yesterday acknowledged that Greece’s entry into the euro area back in 2000 had not been based on «sustainable factors.» The truth is that Germany had at that time expressed reservations about allowing both Greece and Italy into the eurozone. Italy was a founding member of the European Communities and a member of the G7 and, as a result, it could not easily have been left out of the common currency zone. Therefore, Greece was also accepted along on the grounds that its participation in the common currency was too small – just over 2 percent – to be too damaging. It seems the Germans miscalculated. But that’s history. The campaign to save the euro and Greece has been decided and the main question now should be how the Greek government will go about handling the challenge. There’s no doubt that the next three years will be nothing like anything we have seen until now. The Socialist administration has zero room to maneuver. We are in for some serious spending cuts on all levels and there’s a high risk of social turmoil. The unchecked spending of the past 30 years may well be succeeded by a long spell of scarcity. The political system must clearly adapt itself to the new landscape and politicians must cut down on talk. No amount political tap-dancing will get us out of the current emergency.

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