Paul Taylor writes: An economic collapse of Greece, apart from the suffering it would cause and the lost billions for European taxpayers, could aggravate all three of Europe’s other crises and destabilize the fragile southern Balkans.
With tension already high in the eastern Mediterranean due to civil war in Syria, the eternal Israeli-Palestinian conflict, the unresolved division of Cyprus and disputes over offshore gas fields, a shattered Greece might turn to Russia for help. In exchange, it might veto the next extension of EU sanctions against Moscow, or even offer access to naval facilities once used by the United States.
Athens is already struggling with an influx of refugees from the Syrian and Iraqi conflicts who wash up on its Aegean islands, seeking the safest transit route to Europe’s prosperous heartland in Germany or Sweden.
Cash-starved Greek authorities are more than happy to see them head north in search of asylum elsewhere in the EU. It is not hard to imagine a government cast out of the euro zone using migrants as a means of piling pressure on EU countries.
The “boat people” crisis has proved divisive in the EU, with Italy and other frontline states accusing their northern and eastern partners of lacking solidarity by refusing to co-finance or take in quotas of refugees. Britain has refused to take any.
Failure to resolve Greece’s debt crisis after five years of wrangling makes the EU look weak and divided in the eyes of Russian President Vladimir Putin, Chinese President Xi Jinping and others looking to expand their power.
Brussels officials acknowledge that the euro zone crisis has caused a renationalization of decision-making on some policies and sapped the “soft power” of Europe’s model of rules-based supranational governance. It has weakened the EU’s hand in world trade and climate change negotiations.
Worse may yet be to come.
Britain’s demand to renegotiate its membership terms and put the result to an uncertain referendum by 2017 raises the risk of the EU losing its second largest economy, main financial center and joint strongest military power. [Continue reading…]