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Marina Yannakoudakis MEP: What price the pro-bailout victory in Greece?

Yannakoudakis MarinaMarina Yannakoudakis is a Member of the European Parliament for London. Follow Marina on Twitter.

Six weeks ago, I wrote an article for Conservative Home about the fallout from the French and Greek elections. Today we find ourselves in a familiar situation. The French have rallied round socialists who promise a “pro-growth” agenda and the majority of Greeks have voted against harsh conditions imposed on them by the EU and the International Monetary Fund.

A narrow win for pro-bailout New Democracy does not disguise the fact that 50% of Greeks voted for parties who promised to tear up the austerity memorandum. Alexis Tsirpas is the motorcycle-riding poster boy for those who wish to cancel the deal drawn up by Brussels and the IMF. He may have failed to top the ballot and win the 50 additional seats that is the prize for plurality, but together with the four other parties opposed to the bailout, anti-austerity candidates won a majority of the votes.

New Democracy leader Antonis Samaras – the favoured candidate of German Chancellor Angela Merkel – recognised this when he called for a grand coalition, or, as he put it, “a national salvation government”. National salvation is an interesting choice of words, not least when New Democracy’s campaign mirrored that of William Hague in 2001. Indeed Samaras’ slogan for the election could easily have been “Ten days to save the euro”.

This begs the question: are the euro and national salvation synonymous? I think that those who voted for New Democracy believe so, or at least have been led to believe so. New Democracy painted a catastrophic picture of what a return to the drachma would bring, with Samaras claiming that a leaving the euro would be a “nightmare.” While, clearly a return to the drachma would create a degree of turmoil for Greece, are the pro-bailout parties merely delaying the inevitable by clinging to the single currency?

The Euro crisis has had a profound negative effect on the British economy and the UK government is right to promote stability in Athens. While stability is important, I still find it difficult to believe that staying inside the Euro is the only way out of bankruptcy for Greece. To reach the debt targets set by the EU and the IMF will require the Greek people to suffer more hardship. My husband is Greek and I have many friends and family in the country and I simply don’t believe that the Greeks can give any more.

Samaras has pledged to request more leeway from Brussels and the IMF, but Eurozone officials have made it clear that there will be no change to the strict debt-reduction targets. And as Tsirpas has decided to stay outside the tent, he is well-positioned to create trouble for whichever pro-bailout coalition emerges. As such, any new government may well be short-lived. The markets know this which is why there has been a less than enthusiastic reaction to the New Democracy victory.

The Greeks seem to have put their fate in the EU riding to rescue them like a knight on a white charger. But nothing in this life is free. If Germany is to save Greece, the country will be required to relinquish more control over its economy than ever before. Greece and the Eurozone will face a stark choice between the single currency and a form of federalism which will see Brussels oversee not only government spending, but taxation, social policy and employment laws.

I don’t believe that even the most Europhile nations are ready to surrender so much sovereignty. I work closely with Greek MEPs in the European Parliament, including those from New Democracy, and not once have I felt that any of them were ready to sign up for wholesale federalism. And therein lies the weakness of the Euro. While the economy was riding high, the single currency was a guilt-free treat, a snack you could eat between meals without gaining weight. Now in the downturn, the Eurozone countries emerge fat and bloated with little alternative than to sign up for a Brussels-mandated star jumps at a Federalist boot camp.

The new Greek government may be willing to pay the price of greater integration with Europe, but it must understand that it is paying a price. On the eve of the election, New Democracy ran a party political broadcast asking: “How could we explain to our children that we let Greece leave the euro?” The same politicians must be ready to explain to their children how they mortgaged the country’s sovereignty to an EU superstate.


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