ECR Party

The euro crisis is far from over

2015 was a tough year for the European Union.

Among the many difficult years the EU has had to live through in recent times, 2015 stands out for the severity of the challenges thrown up and the failure of EU institutions to deal with those tests adequately.

While the migration crisis and the near collapse of the Schengen agreement have dominated the news in the second half of 2015, it was the Greek euro currency crisis that dominated news earlier in the year; a crisis that saw tensions and tempers rise throughout the hot summer months as that country narrowly escaped bankruptcy.

Now, in 2016, the Greek economy looks set for another rough ride. If it is to be granted the next tranche of its €86bn bailout, the hard-left Syriza Party and its slim parliamentary majority will have to push through a raft of unpopular EU-imposed austerity measures such as raising taxes on farmers and reforming the pension system. Politically and economically, tensions are therefore unlikely to dissipate.

Given that Syriza will have to impose the austerity package despite being elected on an anti-austerity ticket in 2015 shows the dominance Brussels’ distant and largely unaccountable institutions now exercise over democratically elected national governments.

This disregard for the voices of ordinary citizens raises serious concerns surrounding the legitimacy of the EU’s over-arching authority and is raising scepticism towards Brussels’ federalist ambitions across the European continent. As well as Syriza in Greece, eurosceptic parties from the left and right have performed well in 2015 in France, the United Kingdom, Sweden, Denmark, Austria, Portugal, Spain, Finland, Italy and Poland, among others.

Putting the EU’s democratic crisis aside for a moment though, a more immediate problem surrounds whether the bitter medicine Greece is being forced to swallow in order to keep the EU’s common currency experiment alive will actually have a positive effect on the country at all. Some economists believe the debt – currently at 187% of GDP – is simply too large to bring under control without a debt write-off – something Brussels is adamant it won’t do for fear other country’s will seek such reductions in their debt.

Talk of the EU economy returning to its high of 2008 should not distract European leaders from the fundamental weaknesses in the common currency. Dragging reluctant countries into a federal EU with a mixture of threats and political interference, to a point where decisions on national spending and taxation are taken by unknown technocrats in Brussels is a recipe for disaster and the backlash from electorates we are already witnessing will only intensify.

The EU faces an existential crisis in 2016: whether to reverse EU integration and return powers to national capitals – as the AECR calls for and an increasing number of voters support – or whether to push on, despite all the warning signals, with the continued centralisation of power in Brussels.

European leaders would do well to step out of the EU’s echo-chamber and start listening to the people.