News from the EU today state that Spain has requested a bail-out package for its banks and that the Eurozone finance Ministers have agreed to grant the nation with €39.5 billion which will be awarded next week. Normally, such a procedure would need experts from the IMF, the European Commission and the European Union (the so-called Troika) to go through. Nevertheless, in the words of Jean-Claude Junker "We have also welcomed the decision by the ESM (European Stability Mechanism) board of directors to authorise the first tranche of the programme of up to 39.5 billion (euros). The disbursements will be made in mid next week,"
This is an overall positive reaction of the EU, which has for the first time used the availability of ESM/EFSF funds to assist a nation in need. This is the main reason that the above mentioned funds were created in the first place. The handling of this situation should be made an example of any similar cases in the future. Neverthless, one things springs to mind: why weren't solutions like the above used to assist nations like Greece and Cyprus as well? Why were the Greek and Cypriot banks denied of direct assistance from the ESM/EFSF fund?
The answer is simple and it was given to me by Craig James Willy: Machtpolitik. The terms has its origins in 1979, in a book by Martin Wight, and it is used to describe power politics in the international scene. It is used as a form of international relations in which sovereign entities protect their own interests by threatening one another with military, economic or political aggression. To put this in a less subtle way this is what the Eurogroup is saying: Greece and Cyprus are much smaller and of much less importance to the EU than Spain.
|Martin Wight. Source: Wikimedia Commons|
Whilst I am positive that some will in fact disagree with me on this, I would be that this is what the Greeks and Cypriots feel. They have to pay for the sins of their banks, and yet someone else is getting better treatment than they are. And of course I am not going against to what I have been saying all this time and state that Spain should also suffer from more austerity measures. On the contrary, this was an excellent decision. However, it should be implemented to Greece and Cyprus as well.
The EU in its design, was aimed at promoting solidarity and equality amongst nations. Why should a nation which has suffered so much as Greece being forced to suffer more when the alternative is both easier to implement and less brutal on the people? Why should Cyprus have to go through the same as Greece just to conduct an economic experiment, with an ending act we already know?
The situation is not just of two small nations. It is of how we treat the little guy in general. If the Union does not care of two small nations why should it care of poorer citizens, why should it bother with assisting those in need? If we do not protect the little guy how can we protect the rich and strong ones? To quote JFK "If a free society cannot help the many who are poor, it cannot save the few who are rich."
The same situation in Greece and Cyprus now can easily happen in some other state in the future. What is the EU going to do about that? Make that country suffer and then assisting it or just help it like it should? As the answer to that is ambiguous, uncertainty about the future grows. The power to make the EU more democratic, efficient and sustainable is in our hands. We will use it?