8/9/2019 Greek Crisis Is Midwife to Completion of the European Project

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Greek Crisis

Is Midwife toCompletion of theEuropean Project

JACQUES ATTALI,formerly the top aide to French President Franois Mitterrand andthe founding president of the European Bank for Reconstruction and Development, is now

president of PlaNet Finance.His most recent book is A Brief History of the Future.

parisWhen the euro was in the process of being created during the 1990s, it

was clear that it couldnt ultimately survive without a European ministry of

finance and the coordination of tax and fiscal policies for the whole of the euro-

zone. This was to be the necessary next step after the establishment of the

European Central Bank.

Of course, because the Berlin Wall fell just as the long process of preparation tolaunch the euro was getting under way, enlargement overtook the agenda of the

deepening of Europe.That is why today Europe is such a strange animala union

with a central bank and single currency but without a ministry of finance to coordi-

nate fiscal and tax policies across a series of independent sovereign states.

Now Europe faces a moment of truth. We are now realizing that having a single

currency means there must be a great deal of solidarity across the eurozone or every-

one will suffer. If Greece fails, so will Spain and Italy and even Germany and the rest.

There are a lot of assets at stake because European economies have become so inter-twined through the transactions of the euro economy that, as with the securitized

mortgage crisis, no one really knows the full extent of risks that might emerge out of

this black box if Greece defaults.

Simply, integration has gone too far to allow the financial collapse of Greece or

any other state in the eurozone.

Though first appearances might suggest that this crisis is pulling Europe apart

for example, the great resistance of the German public to bailing out Greece if it

Though first appearances

might suggest that this crisis

is pulling Europe apart, in fact

the end result will be that it

will compel Europe to complete

its deepening agenda.

SPRING 2010 65

AS THE WORLD TURNS

8/9/2019 Greek Crisis Is Midwife to Completion of the European Project

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comes to thatin fact the end result will be that it will compel Europe to complete

its deepening agenda.

This is exactly what happened at the moment of the creation of the euro. Many

were reluctant at the outset to join the euro. But the single market of the European

Community was impossible to sustain without a single currency. It became clear to

everyone that if you had a single market with different currencies, you would have

trade competition by devaluation. A single currency was thus the only option if

Europe wanted a single market. So, even if reluctantly, everyone who wanted to ben-

efit from the single market had to join the single currency.

Today it is the same. Even if opinion is for the moment against a single tax and

fiscal policy for all of Europe, Europeans will have to go along at some point.Without

it, the euro will not survive. Since everyone has too much to lose, first we will wit-

ness, as we are already beginning to, a de facto coordination of policies. In the com-ing years, that coordination will be institutionalized as it was envisioned at the out-

seta European Ministry of Finance to go along with a European Central Bank.

Greece was the birthplace of Europe.And the Greek crisis today will, in the end,

have been the midwife of the completion of the European project.

L

Greece was the birthplace of

Europe. And the Greek crisis

today will, in the end, have

been the midwife of the com-

pletion of the European project.

SPRING 201066

AS THE WORLD TURNS