Peter Hoskin

Greece is haemorrhaging its sovereignty

One of the upshots of the euro was always a certain loss of self-determination. Even on a basic level, its member states had relinquished control of their monetary policy and handed it over, wholesale, to the European Central Bank in Frankfurt. But — as James suggested last week — it’s only now that we’re seeing the dismal endpoint of that equation. The conditions attached to the bailout packages mean that Greece’s fiscal policy is ever more decided in Brussels, and decreasingly in Athens.

Which is why Jean-Claude Junker’s comments from over the weekend are worth returning to now, as an example of this unforgiving process. “The sovereignty of Greece will be massively limited,” is how the Eurogroup chief put it to a German magazine. “For the forthcoming wave of privatisations they will need, for example, a solution based on a model of Germany’s ‘Treuhand agency'” Which is to say, he’s pushing for the extensive sort of fire sale that East Germany experienced after it emerged from the swamp of Soviet control. This approach could raise some euro cents for the Greek coffers, but it also comes with some significant concerns attached.

There are two particular questions that spring from all this. With external “privatisation experts” already swarming over Athens to force the process along, how much further can the integration of the eurozone — and its fiscal policies — go? And will the non-eurozone countries, such as Britain, take the opportunity to segregate themselves further from this European core? The way certainly appears to be there. And, increasingly, the will.

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