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Germany's Role in Europe and the European Debt Crisis
The German government proposed last week that a European commissioner be
appointed to supplant the Greek government. While phrasing the German
proposal this way might seem extreme, it is not unreasonable. Under the
German proposal, this commissioner would hold power over the Greek
national budget and taxation. Since the European Central Bank already
controls the Greek currency, the euro, this would effectively transfer
control of the Greek government to the European Union, since whoever
controls a country's government expenditures, tax rates and monetary
policy effectively controls that country. The German proposal therefore
would suspend Greek sovereignty and the democratic process as the price
of financial aid to Greece.
Though the European Commission rejected the proposal, the concept is far from dead, as it flows directly from the logic of the situation. The Greeks are in the midst of a financial crisis that has made Greece unable to repay money Athens borrowed. Their options are to default on the debt or to negotiate a settlement with their creditors. The International Monetary Fund and European Union are managing these negotiations. Read More »
Comments? Send them to feedback@stratfor.com
Though the European Commission rejected the proposal, the concept is far from dead, as it flows directly from the logic of the situation. The Greeks are in the midst of a financial crisis that has made Greece unable to repay money Athens borrowed. Their options are to default on the debt or to negotiate a settlement with their creditors. The International Monetary Fund and European Union are managing these negotiations. Read More »
Comments? Send them to feedback@stratfor.com
