European Hypocrisies

Note kindly translated by Anne-Marie de Grazia

The new reunion of the Eurogroup which took place Tuesday, July 7th, stands out as being a summit of public hypocrisy. The same hypocrisy also distinguished the meeting of the evening of Monday 6th between Mrs Merkel and François Hollande at the Elysée Palace. France and Germany called on Greece, through the mouth of François Hollande, to submit a list of «serious, credible proposals, which can translate (its) will to stay in the Eurozone»[1]. The German Chancellor, on her side, has said that she was waiting « now for quite precise proposals from the Greek Prime Minister »[2]. But one hypocrisy can hide another. The discourse of the actors is hiding – rather poorly at present – the fact that without a considerable amount of solidarity between the member countries, a monetary union such as the Euro is condemned to perish.

The hypcrisy of the demand for reforms

It is stupefying, and in appallingly bad faith, to see actors of such eminent responsibilities as Mrs Merkel and François Hollande, continue asking Alexis Tsipras for « reforms, » when the latter has, ever since his election on January 25th, stated all the necessity of carrying on profound reforms in Greece. In fact his government, uniting the Syriza left and the sovereignist right of ANEL (the « Independent Greeks»), is certainly the best placed government to carry on an important program of reforms and of modernisation in Greece. This government is not bound by clientele relations, and practices of collusion and corruption which were developed to the point of becoming emblematic of the government of Papandreou (the « socialists » of PASOK) as well as of the government of the right of Samaras (« New Democracy »). In fact, the government which came out of the elections of January 25th has proposed a reinforcement of the tax system, transferring part of the tax-load onto the richer citizens and cancelling numerous fiscal niches and exemptions, and it has also proposed important reforms touching all sensitive subjects, including the regime of pensions. But Alexis Tsipras has also said that in order for Greece to continue to make efforts, efforts which have – let’s be reminded of this – allowed it to pull off a primary budgetary balance (meaning, before the payment of the debt), that is, a budgetary surplus, it needed to find back to confidence in its future. However, and this has been attested from many sides, be it by economists who are classified rather on the left (such as Krugman[3], Stiglitz[4] or Piketty) or by international institutions classified on the right such as the IMF[5], the Greek debt is not bearable. It is digging the country a little bit deeper every day into the hollow of depression. The reforms which the Greek government is disposed in undertaking are linked, and it couldn’t be otherwise, with an in-depth restructuration of the Greek debt, probably on the model of what was granted Germany in 1953.

So that asking for “serious and credible reforms” as the German Chancellor and the French President have done, makes no sense. These proposals have already been made weeks ago. Some of them, particularly the tax measures hitting the richer citizens, were even found “excessive” by the Eurogroup. In reality, in refusing to see the real point of blockage, the question of the restructuring of the Greek debt, Mrs Merkel and M. Hollande were giving the Greek government a flat turn-down. But, and this is the most repugnant aspect in this crisis, these flat turn-downs are sugar-coated, dripping with « benevolence, » declarations of friendship, proclamations of a will to keep Greece in the Eurozone. This is hypocrisy in its purest state.

The hypocrisy of the European Central Bank (BCE)

The ECB has joined this concert of hypocrisy and bad faith. Let’s be reminded of the facts: it is indeed maintaining the aid program for emergency liquidity (called « ELA ») for the Greek banks, BUT it is lowering its ceiling, which de facto organizes an increasing penury of liquidities in Greece. If the ECB had confined itself to its rules and to its charter, it should have suspended ELA no later than Saturday 27th. But the rules have been so much twisted around and again since 2012, be it at the occasion of for the OMT (Outright Monetary Transactions) or for the TLTRO, that they don’t mean much anymore. Or, to be more precise, they are being invoked only when a somewhat bothersome political decision needs to be taken. Hypocrisy again, and again.

So that, if the ECB had suspended the ELA on June 27th, one might have screamed about interference into a Greek political problem, namely the referendum. But in maintaining the ELA while maintaining the ceiling at the level fixed on June 26th, the ECB has forced Greek banks to close and has limited the Greeks’ access to liquidity, for households as well as for companies. It has, moreover, put strict limits on the automatic transfer mechanism within the Eurozone (which is called the Target2 account). The result has been a massive interference into the Greek political life. This interference did not lead to the expected result, and the Greeks rejected the project of agreement which had been submitted to them by a majority of 61% of “No” votes. Then, the BCE decided on July 6th to start to apply a reduction in value? to collaterals provided to it by Greek commercial banks for its loans. In fact, the ECB is in the process of expulsing Greece out of the Eurozone [6]. Here again, refuge will be taken behind the « rules » of the ECB and of its charter. But it can be pointed out that there were no such qualms in many other instances. The application of the rules appears to be elastic indeed, and subjected – in reality – to the political good-will of an organization which is itself not subjected to any political control. A new demonstration of the immense hypocrisy of M. Draghi and of his colleagues.

A common currency without solidarity?

But the situation in Greece raises another problem. Can one go on making the « Eurozone,» or rather, to call it by its name, the Economic and Monetary Union, function without organizing within its fold important transfer fluxes? When California found itself defaulting on its payments, during the financial crisis of 2007-2009, it did not exit from the Dollar zone because it benefitted from important transfer fluxes coming from the Federal budget of the United States. However, today, not only are transfer fluxes very limited in Europe (where the EU budget is capped at 1,23% of GDP) but they run against an ever increasing opposition from numerous countries, Germany foremost.

We do not want here to bring up any reproach against Germany. The establishment of a budgetary federalism within the Eurozone would take 8% to 12% off the German GDP annually, depending on the calculation methods. The German economy could not survive this. The question therefore is not of knowing if Germany wants a politics of transfers, given that it cannot pay the price for such. But then, one must draw the consequences concerning the Eurozone. And one can well see that the Eurozone cannot survive without a mechanism insuring sizeable transfers within it. And this, the various authorities in France, as well as in the neighboring countries, know full well.

So that this obstinate perseverance, from one meeting of the Eurogroup to another meeting of the European Council, to keep alive a monetary zone without accepting to pay the price for it, is a dangerous folly. To maintain that the stability of said zone could be jeopardized by one country, Greece today and who knows, maybe tomorrow Spain, Portugal or Italy, partakes, again, of the most awesome hypocrisy.


European governments thus sinking into a hypocrisy that is many-faced but the results of which are more evident every day, proceeds also, at bottom, from a lack of courage. Lack of courage of Mrs Merkel who does not dare to tell her people that it will have to pay to have the Euro, or that there will be a Euro no more [7]. Lack of courage of Mr Rajoy, who has long aligned the fate of Spain with the one of Germany and who is realizing only tardily that an expulsion of Greece from the Eurozone would put him, now, next in line. Lack of courage of M. Renzi, the dashing Italian Prime Minister, who committed the same errors as his Spanish counterpart, when logic and reason commanded him to support Greece.

Lack of courage of all of them, who will probably make Greece a scapegoat, a victim of expiatory sacrifice, for a situation which in reality is everybody’s responsibility, refusing to look truth in the face while it is still time. And if this is not an immense and unmeasurable hypocrisy, words no longer have a meaning.





[3] Krugman P., « Europe’s Many Economic Disasters », New York Times, 3 July 2015,

[4] Stiglitz J, « Europe’s attack on Greek democracy », 29 June 2015,–stiglitz-2015-06

[5] The Guardian, « IMF says Greece needs extra €60bn in funds and debt relief », 2 July 2015,

[6] Sandbu M., « Free Lunch: ECB, enemy of the euro? », Financial Times, 6 July 2015,

[7] See Godin R., Grèce : Pourquoi Angela Merkel refuse de parler de la dette grecque, La Tribune, 7 juillet 2015,


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

Vous aimerez aussi...

Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search