“Is Greece ready for the next crisis? My answer is no!

by Guy Verhofstadt

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Guy Verhofstadt, President of the ALDE Group

“Dear colleagues, Prime Minister,

Welcome back to the European Parliament. Four years ago you were a little bit afraid to come to Strasbourg. This time you’re here to talk about the future of the European Union, our common future. But let me nevertheless say something on the Greek crisis. It’s good news that Greece no longer depends on European aid. But I am not so enthusiastic as Olaf Scholz, the German minister of Finance, who called the three Greek rescue packages a “sign of solidarity”. Well if this whole exercise was solidarity, he can keep it. Greece might effectively be back on a path of sustainable debts, but the way it was achieved, has left a trail of wounds and scars that still need to be healed. I’m more of the opinion of Mr. Dijsselbloem who said that both sides are to blame. Greece for not reforming deep and fast enough. And Europe for merely focusing on pure accountancy and austerity, instead of real reforms in the Greek economy and Greek society.

But the key question I want to raise with you, Mr. Tsipras, is if Greece and by extension the whole euro zone is ready for the next crisis ? And my answer is no!

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Aléxis Tsípras, Greece’s Prime Minister

Greece was all in all a small problem, that we have turned into a very big one. A total historic debt, accumulated during decades, of roughly 300 billion, that’s less than 2 percent of the yearly production of European wealth of 15 trillion. And this little 2 percent almost derailed the entire euro. Why? Because nearly twenty years after the introduction of our single currency, we still not have the right institutions, still don’t have the right governance. It all depends on the ECB, on Draghi. But you and I, we know all here, we need far more:

· We need a full-fledged banking union (to safeguard the stability of our financial sector) and we don’t have it;

· We need a common euro zone budget (to absorb economic chocks) and we don’t have it ;

· We need a safe euro asset, a Eurobond or something similar to compete with the dollar (to better manage our debts and be competitive with the dollar) and we don’t have it;

· We need a European minister of Finance (to enforce real economic reforms) and we don’t have it.

Four years ago Prime Minister, we had an energetic exchange of views in this house, some say even ferocious. This time I will keep it more moderate. I need to save my energy for Mr. Orbàn this afternoon. But you certainly remember that I asked you how you wanted to be remembered? As an electoral accident or a revolutionary reformer? My answer today is you didn’t become the one nor the other. The reality on the ground — in spite of the enormous sacrifices made by the ordinary Greek citizens — is that the Greek clientelistic system is still largely in place. Like also the old system of the eurozone is still in place.

You know that the word crisis comes from classic Greek — ‘krinome’, what means ‘moment of truth’, ‘moment of choice’, ‘moment of decision’. Well, that moment of truth, choice and decision still has to come for our union, especially our monetary union. And until that moment, Greece, Italy, and the whole eurozone will remain under threat; the reason also that we urgently need to start with the refoundation of our Union”.

Watch the video here.

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