With the clock ticking, the Greek government must within a few days decide whether to accept more austerity (and perhaps later debt relief) or leave the eurozone, which will in all likelihood also mean leaving the European Union. To the eurozone countries, a deal with Greece heralds another danger: that it may prove detrimental to their own sovereignty.
Of all the unpleasant Greek realities pointed out in the non-Greek press, one example of fiscal largesse stands out. An article in the Greek Constitution prevents changes to a fiscal scheme that exempts owners of shipbuilding and shipping companies from paying income taxes on their turnover.
A relic of the military dictatorship of 1967-1974, the tax exemption cannot be changed, not even by a simple parliamentary vote. It has become a lightning rod for those accusing the Greeks of systematically refusing to make real changes to the country's governance.
One of the eurozone's latest proposals to Greece suggested this article be scrapped. That would-be provision was part of the package with creditors that the Greeks turned down with their ‘Oxi' vote on July 5. There is no doubt that elsewhere in Europe, some governments were secretly quite content with the outcome of the plebiscite - and not just because it brings Grexit a leap closer.
Because if a set of countries is allowed by precedent to interfere in another country's governance in such a fundamental way, how will the Netherlands (for example) deal with a future demand to end its own fiscal chicanery that allows corporations to avoid taxes? Would Luxembourg be forced to accept a further crackdown on its international taxation system?
What is happening to and in Greece is unparallelled. A group of nation states and international institutions is discarding national sovereignty, purporting to force a government, within its own borders, to dispense with its own policies and replace them with outside orders. Were this happening in the United States and not Greece, the army would already be on the march and aircraft carrier fleets closing in while militias dig manholes around cities and prepare fallout shelters.
When Soviet dictator Joseph Stalin was warned about angering the Vatican, he famously asked his minister of foreign affairs how many divisions the Vatican had. Today, the question is not just about military units, but also about the number of big banks in one country. Long ago, George Washington said it best: "Banks are more dangerous than standing armies." Greece spends a lot on a still-small army, and its banks are kept alive only by emergency aid. If the European Central Bank cuts its Emergency Liquidity Assistance this Sunday, as ECB President Mario Draghi has warned, Greece is finished.
But for all the bluster and strategic positioning concerning Greece, some leaders seem to understand that every new move in the Greek crisis is an attack not just on Greek sovereignty, but also on theirs. France is obviously beginning to worry.
With a budget deficit above 4 percent, higher than the 3 percent allowed by the eurozone's Growth and Stability Pact - and its national debt standing at 95 percent, also much higher than the 60 percent allowed by the pact - it is no wonder French President Francois Hollande is actively seeking a way out for the Greeks. He hopes to avoid setting a precedent for future interference in France's governance of its own sclerotic economy.
Other countries, such as Austria and Finland, that were until recently fiscal hawks on the Greek question, also appear to be toning down their tough rhetoric now that their own governments' finances are going south.
Solidarity is not a one-way street. Greek Prime Minister Alexis Tsipras tirelessly repeats that he aims to change the European Union. He wants the union to rid itself of its "neo-liberal shackles" and become a more political union based on social values.
What he fails to understand is that, paradoxically, his call for more solidarity also automatically means that countries get more say over other countries. Because with aid comes the right to interfere in a country's governance. This is precisely the kind of precedent many countries in the European Union wish to avoid.
They'd rather throw the Greeks out than give Berlin legal and political precedent to interfere with their own doings.
(AP photo)
