Guest post. Translated from the French by Tim Gupwell
The chorus of voices is becoming increasingly strident and events are moving very fast: the now inevitable Spanish request to benefit from a rescue package; plus the impending recognition of the failure of the second Greek plan, followed by the negotiation of a third one with a new extended timescale – whatever the result of the elections this week-end.
Having claimed as a “victory” the Spanish banking bail-out (which he had tried to avoid at all costs), Mariano Rajoy can no longer remain in denial, and will now have to acknowledge that he has had to accept seeking refuge under the protective umbrella of a Europe which is not adapted for a bail-out of this scale. All the more so since the ESM is not yet operational and the conditions in Germany are not conducive to its ratification and creation. The head of the Spanish government does risk, however, being asked – damagingly – to explain why he is trying so hard not to acknowledge that conditions for the bail-out of his country’s banks are in the process of being drawn up.
The ramifications of what has been set into motion in Spain are being felt all over Europe. While the Irish and Portuguese governments are officially refusing to envisage a renegotiation of their respective rescue packages, their opposition parties are demanding it, and everyone in both countries is waiting for the vice to be loosened. Yesterday evening in Lisbon, the traditional ‘marchas populares’ on Freedom Avenue seemed a very different type of festival, in a country once again without a future and having nothing more to offer to its youth than the prospect of departure.
In a sign of the times, Alexis Tsipras, the leader of Syriza, has signed off an opinion piece in the Financial Times with the title “I will keep Greece in the eurozone and restore growth”. In it he explains that the principal objective of a leftwing coalition would be the implementation of fiscal reforms intended to force those to pay who, thanks to the political patronages of an outdated two-party system, have managed thus far to avoid taxes. The remarks of Wolfgang Schäuble and Jean-Claude Juncker, as reported by the Financial Times Deutschland, leave no room for doubt: they are ready to grant more time to Greece, as long as the essentials of the programme which needs to be carried out are maintained.
Just as spectacular: the reception by the French Elysée Palace of a delegation of the German SPD party, aiming to increase the pressure on Angela Merkel in order to kick start an overall negotiation process, based on a renegotiation of the Fiscal Treaty and a European plan for growth; things that she obstinately refuses to envisage. Yesterday, the ECB swept away the principles of any pre-conditions or time-delays and demanded the immediate implementation of the Banking Union which is destined, according to its designers, to survey, regulate and deal with any incidents arising from the tumultuous debt-reduction of the European banks. The publicly expressed opposition about the order that needed to be followed between the creation of the Fiscal Union and the Banking Union was brought to a close. Finally, Angela Merkel announced in Berlin that a tax on financial transactions would be adopted before the end of the current German legislative period, due to end in September 2013.
Georges Osborne, the Chancellor of the Exchequer, was wondering yesterday if the only thing that could oblige Angela Merkel to deviate from her unwavering course would be a catastrophic Greek exit from the Euro. It seems today that he could have saved himself the trouble. This, without any detriment to the outcome, since walking backwards has never allowed great strides to be taken!
Next scheduled episode: the meeting this Thursday in Rome between François Hollande and Mario Monti. While the habitual voices of the choir conducted by Wolfgang Schäuble proclaim “Italy is in no danger”, Mario Monti affects serenity in this “crucial moment”. Comediante! Tragediante!