Greek crisis brings ‘village politics’ to EU

Published: 21 May 2010

German Chancellor Angela Merkel played the populist card over the Greek crisis and even rode on anti-Greek prejudices shared by many Germans. Several mainstream politicians described the contagious effect across Europe as "alarming". EurActiv's network reports.

Background

For months, Germany had staunchly resisted calls from other countries to promise help for heavily-indebted Greece.

But this position did not prevent German Chancellor Angela Merkel's centre-right coalition parties from losing a crucial election in the state of North Rhine-Westphalia on 9 May (EurActiv 10/05/10).

This defeat represented a heavy blow for Merkel little more than six months into her second term in office, and means she will have to rely on opposition parties to deliver her policy agenda, which includes tax cuts.

The election was widely regarded as a referendum on Merkel's government.

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Guy Verhofstadt, leader of the Alliance of Liberals and Democrats for Europe (ALDE) group in the European Parliament, said the 'no aid to Greece' standpoint spreading across Europe was causing considerable harm.

"This is indeed a huge threat, because it created an anti-European state of mind among many Europeans, in several member states, within a just a few days. We never had such a devastating effect on feelings of people towards Europe than we have now," Verhofstadt told journalists in Brussels in March.

Before that, in a press release, Verhofstadt had described Merkel’s lack of solidarity with Greece as "shocking".

Merkel’s positions reverberated throughout Europe and misleading information was channeled both by politicians and the media alike.

In Slovakia, a new eurozone member, Prime Minister Robert Fico said Bratislava would only vote on financial aid for Greece after national elections in June, insisting that Athens must do its homework on spending cuts before receiving any Slovak cash (EurActiv 04/05/10).

The European Commission then tried to reassure investors that the multi-billion euro loan package, approved in early May to help Greece tackle its debt problem, would be able to go ahead without the approval of every eurozone member state (EurActiv 05/05/10).

Shortly before a 7 May mini-summit of eurozone leaders, Fico said he did not trust the Greeks and their austerity measures very much.

Misleading information

The majority of the Slovak media reported that every Slovak citizen would have to "give" the Greeks 150 euros. The media also cited Greece's outrageously high social guarantees and legal retirement age of 53, information which was highly misleading.

Little wonder, then, that Slovaks faced with their own socio-economic insecurities viewed the loan with suspicion, EurActiv Slovakia reports.

The elections due on 12 June will be a "referendum on Greece," said Iveta Radičová, leader of SDKÚ-DS, a party of Christian Democrat affiliation.

Excuse for a clean-up

In Hungary, where centre-right party Fidesz won national elections by a landslide (EurActiv 26/04/10), the Greek crisis helped the new leadership to replace the National Bank president, EurActiv Hungary reports.

Fidesz leader and new Prime Minister Viktor Orbán demanded the resignation of László Simor, president of the National Bank.

"The slow reaction of Greece shows how badly fast reactions are needed [in today’s economic situation], therefore, as we have the results of the new committee, we will take immediate steps," he told reporters on 19 May.

The previous Socialist government in Hungary, which had earlier negotiated an IMF-led bailout, was a strong supporter of the aid package for Greece. However, the Hungarian aid package was only worth 20 billion euros, of which 6.5 billion was provided by the EU budget, while the Greek package amounted to a massive 110 billion euros.

Overblown stereotypes

In Bulgaria, the EU's poorest country, populist Prime Minister Boyko Borissov made comments which could be seen as offensive by the EU newcomer’s southern neighbour.

Speaking on national radio station Darik, Borissov suggested that Greece could implement some unpopular measures discussed within his cabinet, such as raising VAT to make up for the shortage of budget revenue.

In his typical ‘language of the street’ Borissov commented: "I have said many times that if in a family someone overspends, or does not work, or goes to the casino, this is bad for this family. The same goes for a country."

"Who has problems? The countries where they have the habit of living the good life, of partying and clicking their fingers, of having siestas and then going out for night life at 10p.m. Those are the countries that have problems with the crisis," he declared.

Despite the fact that Bulgaria is not in the euro zone, Borissov also insisted that EU help for Greece should be linked to "very stern conditions".

Election theme

In the Czech Republic, where elections are due on 28-29 May, the Greek crisis has had a huge impact on the campaign, moving debt problems to the top of the agenda, EurActiv Czech Republic reports.

All the parties (except for post-communist KSČM) are sticking to the goal of reducing public finance deficits to below the 3% threshold by 2013, as promised to the European Commission.

Much debate has surrounded the Commission’s proposals on early coordination of national budgets at EU level, with most Czech politicians claiming that there is no need for fiscal coordination at the European level.

"This is a dangerous proposal going against democratic principles. National budgets should be approved by elected representatives, not officials in Brussels," Alexandr Vondra, a conservative (ODS) senator, claimed on Czech national radio.

However, the Social Democrats (ČSSD), who lead pre-election opinion polls, praised the proposals and pointed out that the role of the European Council would only be advisory.

"Brussels will not approve national budgets. This is to remain national parliaments' power. This is going to be a kind of consultation in order to dismiss the fraudulent behaviour which we saw in Greece,” Lubomír Zaorálek (ČSSD) said in response to Vondra.

Extremists reinvigorated

Across Europe, populist and extremist parties have been reinvigorated by the Greece debate. In France, Marine le Pen of the far-right, xenophobic National Front (far-right, xenophobic) rejects any French financial transfers to Greece because she holds that Athens "will never be able to pay it back" , EurActiv France reports.

She believes Greeks should be punished for their "budgetary laxity".

In Finland, chairman of the right-wing, populist True Finns Party Timo Soini said that the whole of Southern Europe should be detached from European Economic and Monetary Union.

He said the current economic crisis was being ruthlessly used to lobby for the development of the European Union into a union of federal states.

A completely opposite view was presented by Finnish foreign minister Alexander Stubb, who spoke of "an internal crisis of the Western world".

"I am rather worried. Village politics, populism and nationalism are all in the air," said Stubb, who is from the National Coalition Party, affiliated to the European People's Party like Merkel’s CDU.

The loan to Greece was passed in the Finnish parliament after 12 hours of "acrimonious debate" by a vote of 108-63.