Pierre Moscovici, the EU’s top economic official, has made a two-day trip to Athens ahead of a key vote for Greece’s current government. The Financial Times reports:
Mr Moscovici praised the Greek authorities and promised “much lighter surveillance” of the Greek reform effort once its four-year €245bn bailout ends in February….
Syriza, the hard-left opposition party that is leading in national polls, has pledged to stop paying installments on Greece’s debt and negotiate new terms with international creditors, including a substantial write-off of eurozone-held debt, if it comes to power.Leaders of the EU’s far-left parties have criticised Mr Moscovici’s decision to visit Greece days before the vote, saying it was “unbearable” and raises “serious questions” about democracy in Europe. Mr Moscovici defended it, saying it was timed to last week’s decision to extend the bailout by two months, rather than the political calendar.
The Euro crisis is nowhere near over, though ECB intervention has changed it from a financial markets crisis to a slow-moving political crisis. The question haunting Europe isn’t whether one of the Club Med countries will go into an interest rate death spiral—the ECB can stop that. Rather, the question is whether political support for staying in the euro will collapse as year after year of high unemployment and slow or negative growth eats at the Club Med countries. Greece, hardest hit by the crisis and the least willing or able of the Eurozone countries to try to transform itself into a north European-style economy, could be the place where the political break comes. But it isn’t the only place where support for pro-Euro policies is dangerously weak.Meanwhile, those watching the crisis from afar should never forget the catastrophic human costs of the terrible series of policy blunders that put Europe in this fix—the youth unemployment rate across the southern Mediterranean stands at about 50 percent, whereas in Germany it’s about 7 percent. That the people who made these decisions have never really paid a political price for these follies, and that in some cases they are still ensconced in prominent government positions, is the most obvious sign that the EU suffers from a deep democratic deficit.And as Europe writhes in its agony, vulture and hyena parties—extremists from left and right—are edging out of the shadows as they wait for the crisis to deepen.Huge U.S. interests are at stake: Few things are more vital to the security and prosperity of the United States than the economic and political health of our EU allies and friends. But so far we search in vain for signs that the Obama Administration has either the will or the vision to address one of the greatest crises in the history of the democratic world.