Eurosummit: Greece in, Britain out?

Eurosummit: Greece in, Britain out?

“It’s almost as if the boat is sailing away and one of our best friends is somehow saying, ‘Bye bye’ and there’s really not much we can do about it,” commented the Finnish Minister for European Affairs and Foreign Trade, Alex Stubb, at the end of last week’s Eurosummit. Unusually, he was not referring to the “black sheep” of the eurozone, Greece, but to Britain, which, as he claimed, “voluntarily, by its own will, is putting itself in the margins.”

British Prime Minister David Cameron objected to the outcome of last Friday’s Eurosummit: After long, painstaking discussions between continental members, a compromise was reached for the setting up of a Single Supervisory Mechanism and the appointment of a supervisor to monitor the functioning of some 6,000 banks and help the ailing ones gain access to a new European Stability Mechanism (ESM). This was good news for the ailing economies of Spain, Italy and Greece and brought smiles to the faces of their leaders against a somber Angela Merkel and a remote Cameron. However, there is a long way to a banking union and there is enough legal fuzziness to clear up.

But the latest summit had important symbolic value for the most vulnerable member of the eurozone, Greece. It gave the chance to European leaders to express their backing to the coalition government of Antonis Samaras and to send a message that Greece, in spite of all its problems, should stay in the eurozone. The six-hour visit by Merkel to the Greek capital just days before the Eurosummit was the precursor for the new approach that seems to have now been adopted by the rest of the leaders: that they are putting all their bets on the Samaras option, hoping that he can deliver where his two predecessors failed. And if Merkel’s support was somewhat cautious, Greece has found an even stronger supporter in the form of the new French president, François Hollande, who is adamant that Greece must stay in the euro, whatever the reality of its economy is. Indeed, it seems that he will be the second major European leader to pay a visit to Athens soon. Historically, France has always been a closer ally to Athens and Hollande appears to be much more understanding to the sufferings of the Greek taxpayers. His statement last week that “you can’t inflict perpetual punishment on countries that have already made considerable effort” was music to the ears of the Greeks about to be subdued by another bout of extreme austerity measures. And it was certainly different with Merkel’s comments that Greece was moving too slowly and that “measures which should have been implemented long ago are still being worked on.”

I do not know to what extent the latest “change of spirit” and the support offered from Brussels to Samaras is a result of a positive assessment of his government’s performance or a compromise against a greater evil. Certainly since his coming to power almost four months ago he has done everything he could to start things moving after the inertia of the George Papandreou team. In the next few days, the Greeks will finally find out what the Greek government gave away during its protracted negotiations with the representatives of the “troika,” in terms of social benefits, salaries and labor rights in order for the country to stay in the euro. If the fee is too high for the society – and all indications are that it is – then the biggest test for the credibility and sustainability of the Greek government lies ahead. But maybe Europeans had other concerns, too. During the latest opinion polls, SYRIZA was revealed to be the first party while the extreme right Golden Dawn has jumped to third place. Still, though, almost half of the respondents (45.5 percent) believe that Samaras is the most competent leader to lead the country versus one-third (29.9 percent) who have put their faith in the leader of SYRIZA, Alexis Tsipras. “There is no other way out but to go with Samaras,” said former Minister Theodoros Pangalos.

European leaders may have agreed with him.