Written by Germán Gorraiz Lopez for SouthFront
Europe is experiencing a period of great upheaval, given that the financial crisis is making even more difficult the process of European construction essential for its competitiveness as a world power. The economic collapse becoming apparent in its peripheral and emerging countries is likely to trigger the dismemberment of the current European Union (EU) and its replacement by a constellation of satellite countries within the orbit of the Franco-German alliance, known as the Big Six.
The troika comprising the European Union, the IMF and the European Central Bank (ECB) has been pressuring Greece for some time with a severe privatization program, as a result of its exorbitant public debt, and has obliged all the political parties to approve more austerity measures and reforms. These have led to violent street protests, as the troika is only proposing the route of privatizations, which will be the responsibility of a new professional and independent team, and will affect railroads, ports, airports, banks and water and electricity companies.
On the other hand, structural and fiscal reforms to modernize public administration and the health sector, improvements to the labor market and the adaptation of fiscal pressure to circumstances – by reducing VAT, currently at 23% – are generic principles which will translate into higher taxes, the reduction of officials, the elimination of public bodies, wage cuts and flexibility in the labor market.
According to a secret document published by the Italian Linkiesta website and taken up by the Spanish ABC newspaper, the troika experts have concluded, “Not only will Athens be unable to face up to its financial obligations, but moreover, it will suffer a severe internal devaluation, a significant fall in prices and wages in the next few years.” Thus, Efecom reports, it is anticipated that Greece’s public debt will increase to 172.7% of its GDP, approximately 381.2 billion euros in 2012, with the fear that it could move from default into bankruptcy.
In the case of Greece finally leaving the Eurozone, this would herald the devaluation of its currency; spiraling inflation, unemployment and unbridled debt; the radicalization of former co-opted and submissive labor unions such as the General Confederation of Greek Workers (GSEE), a breakdown in social dialogue with employers, frequent outbreaks of labor conflict, the dawn of more progressive parties, and the media appearance of anti-globalization groups who, using urban guerrilla tactics, would place security forces in check.
In this situation and without the protective umbrella of the EU, a new version of the 1967 Colonels’ Coup could take place.
The exclusion of Greece from the Eurozone would suppose the start of the dismemberment of the European Union as it is, due to ECB insistence on complying with the 3% limit of public debt for 2013, a difficult undertaking for Portugal, Italy, Greece, Spain, the United Kingdom and Ireland, given that these are already crossing that line.
Hence the replacement of the Eurozone by the Europe of the Big Six (fruit of the centripetal inertia of the new economic scenario), a period that would be marked by the ratification of the good neighbor policy with Russia through the signing of preferential agreements with France and Germany, these to ensure supplies of Russian gas and oil, as well as trade, due to European energy dependence (21% of oil imports and 40% of gas imports are from Russia), and the fact that 40% of Russia’s foreign trade is with the EU, compared to a meager 5% with the United States.
The other peripheral countries (Portugal, Spain, Ireland, Malta and Cyprus) will inexorably follow the centrifugal movement of Greece and, in 2013, will be forced to return to their national currencies and suffer the subsequent devaluation of the same, with a return to income levels of the 1990’s. They will see an exodus to rural areas by urban populations, affected by economic strangulation, a housing embargo and unemployment, and the revitalization of extensive rural areas, the rejuvenation of their populations and a return to forgotten scenarios of economic self-sufficiency, with Finland retaining its membership of the Scandinavian Federation of Norway, Sweden, Denmark and Iceland.
Finally, the Central European Emerging Countries will be forced to devalue their currencies, will suffer massive internal migrations and a return to self-sufficient economies, having to move toward the reopening of abandoned coalmines and obsolete nuclear power stations to avoid economic dependence on Russia.
The case of the UK merits a mention apart. In the wake of the return to power of the Conservatives, headed by David Cameron and true to his Euro-skeptic policy (nil British will to embark on a project in decline in which its sovereignty would be superceded by Brussels’ mandates), they could abandon the EU and pilot their good ship toward a revitalized Commonwealth.