When Will Europe’s Elites Abandon the EU?
The people of Britain - and Europe - have seen through the great project. When will the elites catch up?
It’s often the unwatched pot that boils first. All eyes this week have been on Greece, which is offering to sell some of its islands in a belated attempt to appease its creditors. The prime minister, Antonis Samaras, has been pleading for more time. “We need room to breathe,” he told EU leaders - though it is, of course, the corset of monetary union that is causing the asphyxiation. Angela Merkel and François Hollande have so far been unmoved, insisting that they have eased Greece’s terms for the last time.
After three years, the rest of Europe has lost patience with Athens. Indeed, there is an uneasy sense in the palaces and chancelleries of the Continent that Greece may be the least of their worries. In the past 72 hours, Cyprus has revealed that its deficit is 4.5 per cent, rather than the 3.5 per cent previously declared, making a bail-out there hard to avoid. Ireland has announced that more than a quarter of its owner-occupier mortgages are now in arrears. Portugal, which had rather dropped out of sight since its own bail-out, has seen a sharp fall in tax revenue, and now admits that it won’t meet the EU-mandated deficit target.
It’s true, of course, that Greece, Ireland, Portugal and Cyprus amount, collectively, to less than five per cent of the EU’s economy. They can be rescued without exhausting the bail-out fund; or, alternatively, their defaults might be managed as controlled explosions.
The same is not true of Spain. A default there would blast a fair chunk of the European banking system to smithereens. On the other hand, a further bail-out in Spain - and the Wall Street Journal reports that talks on such a rescue package have now begun - would require at least 350 billion euros.
Until now, the donor countries have been signing putative rather than actual cheques - cheques whose figures are, in any case, too large to be conceptualised. Voters can’t easily connect headlines about Mediterranean crises with concerns about their pension being cut or their school closed. Rather like Britons in the autumn of 1939, they think of the turmoil as distant, almost abstract.