It’s all getting near meltdown out there in the eurozone and the politicians had better come up with something PDQ. All the talk has been of open-ended ECB funding and/or eurozone bonds (effectively the Germans underwriting the periphery’s debts in perpetuity), which many are saying is the only solution. The price to be paid in those peripheral countries will be high – loss of fiscal sovereignty, endless austerity and all bowing to Berlin – and the Germans are probably none too enthusiastic about paying off Spanish and Greek debts for ever either. So nobody wants it and, just for good measure, it’s probably illegal under the EC constitution as well. Make up or break up, Dave? The making-up is a non-starter.
But here’s a thing. Talk to ANYBODY in the eurozone, from Greece to Spain to Finland to Germany, and they ALL want to retain the euro. Yes, even the Greeks. What they don’t like of course is the price they have to pay, but nobody has explained to them properly that the two things live together (look at what Syriza has been saying in the Greek election). The point is that the eurozone lacks democratic legitimacy because the people have never been asked if they support it. It’s just been rail-roaded through by the politicians and all the people can see is bureaucracy from Brussels and control from Berlin. The euro, if you like, had an illegitimate birth through the creation of the eurozone.
So here’s my solution to the euro problem. Ask the people if they want it. My guess is that the answer will be a very strong yes. And, whilst they’re being asked, the politicians should explain the price to them – obey the rules, get the budget deficits down, concede fiscal power to the centre, which of course they won’t like. But at least the people can say they’ve been asked and they’ve chosen a path.
Why has this never been done, you might well ask? It’s because the politicians were afraid the people would say no, of course. And they would have said (and would today say) no the wrong question, for example, do they want to join the EC (with all the stultifying bureaucracy that accompanies that thought coming out of Brussels)? But ask if them if they want to keep the euro and at the same time respect their intelligence by explaining what it means and my belief is that you’ll get a resounding affirmative. I would think it’s a matter of short weeks or months before a bank run in Spain or Greece finishes the whole thing off and then goodness knows what lies ahead. Get the polling done now and give the euro its legitimacy at last. It might even mean a few less riots this summer.