Vilnius and Athens ” “divided by the euro

Lithuania enters Euroland, while Greece is discussing its permanence in the single currency zone. European paradoxes...

Along the streets of Vilnius many are enthused over the entry, from January 1, of their country in the eurozone, but two thousand kilometers further south, in Athens, many citizens are looking forward to the general election of January 25 to cast their votes for the radical left party Syriza which, in case of victory, announced a review of relations with the EU, while some of its leaders invoke exiting the common currency. These are the paradoxes of European “diversity”: in Lithuania, the 19th Member State to have adopted the common currency, the euro is the final linchpin to the free market, to recovered post-communist democracy and to the possibility of doing business with the rest of old Continent; in Greece, the euro is – rightly or wrongly – the noose around the neck of a people forced to face unspeakable sacrifices to patch up an economy sunk into crisis and national budgets on the brink of bankruptcy. Without question the Lithuanian people, beyond their declared enthusiasm, are well aware that economic and social welfare does not depend solely on the circulating currency. Similarly, the Greeks should realize that the recession and the instability of the state budget should be traced back primarily to internal political responsibilities and that if anything, Europe at some point held out his hand (with contributions exceeding 200 billion euro) to prevent the situation from degenerating and the country from plummeting into civil war. Who knows if Alexis Tsipras, popular and determined leader of SYRIZA, reflects on the fact that in many European capitals, the repeated talk of “Grexit”, namely. Greece’s suggested exit from the euro, expresses a desire rather than a fear. Indeed, and unfortunately, several EU governments are no longer willing to “pay the bills” of indebted States … So although until recently a defection from the euro zone was considered impossible – and feared – now the picture has changed. The EU and the ECB have strengthened surveillance, governance, along with future financial instability response instruments. Ireland appears sound, Portugal is on track; there remain serious problems in Spain, France and Italy, but it is believed that recovery from recession is nearing, and with it, the return to the solidity of the euro. Thus – as confirmed by the latest statements from Berlin – this is true even if Athens were to take its own road… In this way, the euro returns to be a gauge of political and public opinion in Europe. Valdis Dombrovskis, Commission Vice-President, a few days ago said that Lithuania’s accession to the eurozone “seals the return of all the Baltic states at the heart of the political and economic system of our continent”. In his opinion January 1 has marked “a symbolic date not only” for the Baltic State, “but for the whole euro area, which remains stable, attractive and open” to new members. Dombrovskis (perhaps guilty of excessive euro-optimism) added: “I am convinced that the presence of the Baltic countries in the eurozone will strengthen the economy of this region, making it” more favorable “for businesses, business actors and investors”. In the same hours in Greece permanence in the euro – or at least the renegotiation of relations between Athens and Brussels – is the focus of the election campaign. The reasoning put forward at the beginning of January by the president of the European Central Bank Mario Draghi appears extremely interesting. In order to strengthen the euro zone it is necessary “to govern together”, said the head of the Eurotower in Frankfurt, with further transfer of economic and monetary sovereignty to EU institutions. The head of the ECB reiterated a concept expressed umpteenth times: there is “a common misconception” whereby the euro area is a monetary union without a political union. “This reflects a profound misunderstanding of what monetary union means”, Draghi clarified. In fact, the latter is possible “only thanks to the substantial integration already achieved between the countries of the European Union”; and the sharing of a single currency deepens this integration. Indeed, Draghi recognized that “our monetary union is still incomplete”. For the ECB President the completion of economic and monetary Union requires the creation of “conditions that make countries more stable and prosperous than they would be if they were not members” of EMU. “All member countries should be able to exploit the comparative advantages within the single market, attract capital and create jobs. And they need to have sufficient flexibility to quickly respond to short-term shocks”. This requires – and it is the task of governments – “structural reforms that foster competition, reduce unnecessary bureaucracy and make labor markets more flexible”. Ultimately, the “economic convergence between countries must not be” a criterion pursued sporadically, but rather “a stable condition”. This means that in order to complete the economic and monetary union, capable of generating growth, jobs and social well-being, “it will be necessary to further deepen our political union”, defining “our rights and duties in a renewed institutional order”.

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