Spain Keeps Hawkish Eye on Greece as Southern Solidarity Crumbles
Tobias Buck in Madrid
Financial Times
Madrid has more reason than most to advocate a tough line against Athens
The travel schedule of Greece’s new finance minister says a lot about the state of the eurozone — and the political shifts created by seven years of economic turmoil.
In recent days, Yanis Varoufakis has held meetings in Paris, London and Rome where he urged leaders to ease the pressure on Greece and reduce its towering debt burden. On Thursday, he is expected in Berlin. Madrid, in contrast, has yet to appear on the itinerary.
The omission of Spain is noteworthy because it underlines how the eurozone crisis has turned Europe’s political geography upside down: when it comes to helping Greece, there will be no such thing as southern solidarity or peripheral patronage.
Italy and France may see merit in engaging with the new Greek leadership, if only to put pressure on Germany in the broader European economic policy struggle. But Spain has more reason than most to advocate a tough line against Athens, as do countries such as Ireland and Portugal.
Viewed from Madrid, the political faultline in the eurozone runs not between a prosperous north and a crisis-ridden south, but between countries that have done their economic homework and those that have not.
The Spanish government of Mariano Rajoy believes it belongs firmly in the former camp, while Greece — and to a lesser extent Italy and France — are in the latter.
Over the past two years, Spain has styled itself as having proved that Europe’s orthodox response to the crisis works. The country has had six quarters of economic growth, unemployment is falling faster than expected, and confidence and investment have both started flooding back.
Once an economic basket-case that came within a hair’s breadth of a bailout, Spain now thinks of itself as the Prussia of the south — austere, disciplined and ready to absorb short-term economic pain for longer-term gains in competitiveness.
After enduring so many lectures on economic housekeeping, Spanish leaders seem to relish the chance to engage in finger-wagging themselves. “It cannot be that we change the rules just because there is a political change in a country,” Cristóbal Montoro, the budget minister, said on Monday. “It would mean the collapse of Europe.”
Officials insist that Spain’s initial response to the crisis — structural reform, budget cuts and tax increases — was based on authentic and independent decisions taken in Madrid. But in selling this unappealing mix to voters, the Rajoy government relied heavily on the argument that there was simply no alternative. The medicine had to be taken, no matter how bitter the taste.
It is precisely that narrative that is now under threat from Athens. If Greece can lighten its debt load while lifting social spending and hiring more public workers, why did not Spain get such a deal?
With a general election looming at the end of the year, it is a question that the Spanish government would rather not see planted in voter minds.
Then there is the Podemos factor. Unlike many other European countries, Spain’s political system has already been transformed by the rise of a new anti-establishment political group that looks very much like the Syriza party that now rules Greece.
Any easy victory for the new Greek government is likely to embolden Podemos, and signal to Spanish voters that backing the far-left might produce the results that mainstream parties so conspicuously failed to obtain.
Against all this, Mr Rajoy has to weigh two countervailing arguments. The first is that pushing Greece towards an exit from the eurozone could have calamitous effects on Spain’s economic recovery. The second is that the rise of Podemos has so far come largely at the expense of the centre-left Socialists.
Indeed, some strategists in Mr Rajoy’s ruling Popular party are rubbing their hands with glee at the prospect of a fragmented adversary and at the chance to attack the main opposition party as an unwitting ally of the radical left.
As disparate as all these factors appear, there is a common theme: Spain and like-minded countries on the European periphery no longer feel that they are in the same boat as Greece. In Madrid, that clearly counts as progress. In Athens, it should be cause for deep concern.
tobias.buck@ft.com
Financial Times
Madrid has more reason than most to advocate a tough line against Athens
The travel schedule of Greece’s new finance minister says a lot about the state of the eurozone — and the political shifts created by seven years of economic turmoil.
In recent days, Yanis Varoufakis has held meetings in Paris, London and Rome where he urged leaders to ease the pressure on Greece and reduce its towering debt burden. On Thursday, he is expected in Berlin. Madrid, in contrast, has yet to appear on the itinerary.
The omission of Spain is noteworthy because it underlines how the eurozone crisis has turned Europe’s political geography upside down: when it comes to helping Greece, there will be no such thing as southern solidarity or peripheral patronage.
Italy and France may see merit in engaging with the new Greek leadership, if only to put pressure on Germany in the broader European economic policy struggle. But Spain has more reason than most to advocate a tough line against Athens, as do countries such as Ireland and Portugal.
Viewed from Madrid, the political faultline in the eurozone runs not between a prosperous north and a crisis-ridden south, but between countries that have done their economic homework and those that have not.
The Spanish government of Mariano Rajoy believes it belongs firmly in the former camp, while Greece — and to a lesser extent Italy and France — are in the latter.
Over the past two years, Spain has styled itself as having proved that Europe’s orthodox response to the crisis works. The country has had six quarters of economic growth, unemployment is falling faster than expected, and confidence and investment have both started flooding back.
Once an economic basket-case that came within a hair’s breadth of a bailout, Spain now thinks of itself as the Prussia of the south — austere, disciplined and ready to absorb short-term economic pain for longer-term gains in competitiveness.
After enduring so many lectures on economic housekeeping, Spanish leaders seem to relish the chance to engage in finger-wagging themselves. “It cannot be that we change the rules just because there is a political change in a country,” Cristóbal Montoro, the budget minister, said on Monday. “It would mean the collapse of Europe.”
Officials insist that Spain’s initial response to the crisis — structural reform, budget cuts and tax increases — was based on authentic and independent decisions taken in Madrid. But in selling this unappealing mix to voters, the Rajoy government relied heavily on the argument that there was simply no alternative. The medicine had to be taken, no matter how bitter the taste.
It is precisely that narrative that is now under threat from Athens. If Greece can lighten its debt load while lifting social spending and hiring more public workers, why did not Spain get such a deal?
With a general election looming at the end of the year, it is a question that the Spanish government would rather not see planted in voter minds.
Then there is the Podemos factor. Unlike many other European countries, Spain’s political system has already been transformed by the rise of a new anti-establishment political group that looks very much like the Syriza party that now rules Greece.
Any easy victory for the new Greek government is likely to embolden Podemos, and signal to Spanish voters that backing the far-left might produce the results that mainstream parties so conspicuously failed to obtain.
Against all this, Mr Rajoy has to weigh two countervailing arguments. The first is that pushing Greece towards an exit from the eurozone could have calamitous effects on Spain’s economic recovery. The second is that the rise of Podemos has so far come largely at the expense of the centre-left Socialists.
Indeed, some strategists in Mr Rajoy’s ruling Popular party are rubbing their hands with glee at the prospect of a fragmented adversary and at the chance to attack the main opposition party as an unwitting ally of the radical left.
As disparate as all these factors appear, there is a common theme: Spain and like-minded countries on the European periphery no longer feel that they are in the same boat as Greece. In Madrid, that clearly counts as progress. In Athens, it should be cause for deep concern.
tobias.buck@ft.com
No comments:
Post a Comment