Timothy Kirkhope: Everyone must share burden of euro’s Greek tragedy

Our TV screens are filled with news of protesters and public outcry in Athens and beyond. And this was the birthplace of democracy.

Over the past few weeks, we have been agonising over what we should do about Greece? What should we do about the Eurozone? Who should pay? Should the Greek government listen to the protesters? How will this impact on countries like the UK that remain outside the Eurozone?

The role of a Chorus in Greek tragedy is to tell the tale before the play itself begins – to prove how unavoidable and inescapable the hero’s tragic destiny will be.

Those of us who felt that joining the Eurozone would have been a mistake for the UK also predicted possible tragedy if countries like Greece and Portugal joined the common currency by simply “squeaking in” to meet the entry criteria.

But I have always been of the view that there is no advantage to the UK in the euro failing. It is still in our interests for it to succeed as another major trading currency alongside sterling.

As I told the European Parliament this week, those who decided on the Eurozone’s membership in the first place, and those who decided how to enforce – or not – the growth and stability pact, must now deal with the consequences.

I welcomed the conclusions from the European Council which make it clear that those outside the Eurozone must be excluded from paying for the consequences. From a solely EU point of view, there is no obligation on the UK to help the bailout other than through the International Monetary Fund (IMF) which is available to all world economies – not just European ones.

Since the UK takes a full part in the IMF, we are, therefore, committed to taking a part of the share of the Greek bailout. The Prime Minister has indicated that our exposure, however, will be minimal, but we cannot avoid all the other implications of a failed economy in Greece.

For a start, there is international exposure through the complicated but spider-like banking connections.

The Greek parliament voted on Wednesday on a package – imposed by international lenders – of public spending cuts, structural reforms and a massive €50bn sell-off of state assets.

The Greek people feel aggrieved, but when every country is tightening its belt, shouldn’t they have to as well?

There have been many times when peoples and governments in Europe have had to take tough economic decisions. In Germany, Ludwig Erhard made extremely difficult decisions post-war in his role as Minister of the Economy, and he is renowned for building up monetary and financial recovery. But it was tough.

Our new coalition government has been forced to make severe austerity cuts due to the colossal over-spending of the previous Labour government. It may not be popular to make these cuts but it is necessary for our country’s future.

Considering Greece’s poor growth prospects and increasing debt burden, it may well default again within the next few years, even if it gets some breathing space through a second bail-out. EU leaders should now be planning for how such a default can be managed.

Greece should restructure its debt as soon as possible. Then an honest discussion needs to be had about whether the country can realistically stay inside the Eurozone in the longer term.

But there is another terrible danger: that we will get through the Eurozone crisis only to realise too late that we have failed to respond effectively to the wider underlying economic crisis, especially our increasingly poor performance in terms of investment, innovation, competitiveness, and productivity.

We need strong action and reform so that we can build more of our own world-class businesses, delivering first-class goods and services, which will deliver the long-term wealth on which our way of life depends. 

Today, Greece may be the important story. But when the history of the 21st century comes to be written, the theme might be how we just survived the monetary earthquake simply to then succumb to the wider economic tsunami.

To go back to ancient Greece, that oft-named cradle of civilisation, Socrates once said: “I am a citizen, not of Athens, not of Greece, but the world.”

We in Yorkshire and the Humber are citizens of the UK, of Europe and of the world. If we are trying to cut back to build a better future here, our fellow Greek citizens will have to do the same.

Timothy Kirkhope is a Conservative MEP for Yorkshire and the Humber. he is deputy leader of the European Conservatives and Reformists

Group at the European Parliament.