AS THE WORLD TURNS

Greek Crisis
Is Midwife to
Completion of the
European Project

JACQUES ATTALI, formerly the top aide to French President François Mitterrand and
the founding president of the European Bank for Reconstruction and Development, is now
president of PlaNet Finance. His most recent book is A Brief History of the Future.
paris — When the euro was in the process of being created during the 1990s, it
was clear that it couldn’t ultimately survive without a European ministry of
finance and the coordination of tax and fiscal policies for the whole of the euro-
zone. This was to be the necessary next step after the establishment of the
European Central Bank.
Though first appearances
Of course, because the Berlin Wall fell just as the long process of preparation to
might suggest that this crisis
launch the euro was getting under way, “enlargement” overtook the agenda of the
is pulling Europe apart, in fact
“deepening” of Europe. That is why today Europe is such a strange animal—a union
the end result will be that it
with a central bank and single currency but without a ministry of finance to coordi-
will compel Europe to complete
nate fiscal and tax policies across a series of independent sovereign states.
its “deepening” agenda.
Now Europe faces a moment of truth. We are now realizing that having a single
currency means there must be a great deal of solidarity across the eurozone or every-
one will suffer. If Greece fails, so will Spain and Italy and even Germany and the rest.
There are a lot of assets at stake because European economies have become so inter-
twined through the transactions of the euro economy that, as with the securitized
mortgage crisis, no one really knows the full extent of risks that might emerge out of
this black box if Greece defaults.
Simply, integration has gone too far to allow the financial collapse of Greece or
any other state in the eurozone.
Though first appearances might suggest that this crisis is pulling Europe apart—
for example, the great resistance of the German public to bailing out Greece if it

SPRING 2010 65
 AS THE WORLD TURNS

comes to that—in fact the end result will be that it will compel Europe to complete
its “deepening” agenda.
This is exactly what happened at the moment of the creation of the euro. Many
were reluctant at the outset to join the euro. But the single market of the European
Community was impossible to sustain without a single currency. It became clear to
everyone that if you had a single market with different currencies, you would have
trade competition by devaluation. A single currency was thus the only option if
Greece was the birthplace of
Europe wanted a single market. So, even if reluctantly, everyone who wanted to ben-
Europe. And the Greek crisis
efit from the single market had to join the single currency.
today will, in the end, have
Today it is the same. Even if opinion is for the moment against a single tax and
been the midwife of the com-
fiscal policy for all of Europe, Europeans will have to go along at some point. Without
pletion of the European project.
it, the euro will not survive. Since everyone has too much to lose, first we will wit-
ness, as we are already beginning to, a de facto coordination of policies. In the com-
ing years, that coordination will be institutionalized as it was envisioned at the out-
set—a European Ministry of Finance to go along with a European Central Bank.
Greece was the birthplace of Europe. And the Greek crisis today will, in the end,
have been the midwife of the completion of the European project.

66 SPRING 2010