After the first European bail-out, which did not leave much of an impact on the tragic economy of Greece, the second package is already en route to the country that is helplessly balancing on the brink of collapse. But if one forgets about tiny troubled economies of the European Union, like Portugal, Ireland and Greece, nobody would / should really care about the euro or the future of the euro zone because the collapse of these countries would not make such a big difference, the EU could move on. However, new developments in Spain and especially in Italy, one of the biggest members in the Eurogroup, reinforce the belief that without leadership and strong commitment the euro will eventually sink and the whole idea of the EU will come under question.
2011 can easily be the decisive year not just for the Italians, the Greeks, the Irish, the Portuguese and the Spanish, but for the whole Europe. We now know that smaller and economically weaker states such as Greece, Ireland and Portugal may well fall into default. But we also know and hear that while their collapse would be a serious blow to the European Union, it would still not make the euro history. Leaders of the Eurogroup and the Union know this, and in my view, that is why they are completely reluctant to get their acts together and decide about the faiths of these countries. However, Spain and Italy are playing in a different league than the states mentioned beforehand. Should these two fail to pay off their debts, European and international markets would simply plummet. Of course, this means that the EU cannot let Spain and Italy behind with their problems!
Nonetheless, I believe that the trouble of Southern Europe provides a one-in-a-lifetime opportunity to both more disciplined member states and the rest. Firstly, countries like Germany, the Netherlands, Austria or Finland that are frustrated about helping out weaker states with their own taxpayers money could force EU counterparts to act more responsibly and more seriously with public finances. It may sound populist, but the carrot-and-stick policy (i.e. we give you money if you change the system as we, the majority, advice you to) could may well work in case of South Europe. Secondly, politicians with clear programmes in Italy, Greece, Spain, etc., who were previously either sidelined or simply did not have the appetite to take part in the shady business of current political elites can now stepin and change the faith of their respective countries. Of course, it is always easier said than done, but there is absolutely no way that there would be no capable people to live up to popular expectations. And thirdly, it will finally turn out whether the euro area is a rich country club where only financially conscious and successful states can flourish with no room for others, especially troubled ones, or a common EU-project where everything rests on solidarity and trust. In theory, it should be the latter, but in real-life, I think the first applies!
I am pretty sure that many people do not, cannot and will not agree with me on this, but still, I feel that there is no room for countries like Portugal, Greece, Ireland, Spain and Italy in the Eurogroup. There should neither be any room for anybody else who cannot comply with EU rules and regulations (oops, in that case there probably would not remain a single country in the euro area) or who cannot function responsibly when it comes to public finances. Yes, of course, this means that there would be only a handful of members in the euro zone (Germany, Austria, the Netherlands, the Scandinavians and let’s say, Luxembourg), but who cares, at least it would not be obligatory for German taxpayers to help out Greeks and also, it would not be a must for George Papandreou to follow EU demands while saving his country. Do not get me wrong, all-in-all, I think the Euro is a great achievement and a solid currency that should be used across the Union, BUT, only with care and a sound understanding of what can happen when something goes wrong, because in the end, something always goes wrong!