Ever since the creation of the single European currency — the euro — there have been battles over who has more power — the individual member countries or the centralist European Commission. The issue goes to the heart of the bailout crisis where the Greek people are now paying a daily price for negotiating with stronger Eurozone partners.
We have the rules,we need to use them better —concrete steps to strengthen EMU https://t.co/iPlt7KNR5i #deepeningEMU https://t.co/vuLorT301w
— European Commission (@EU_Commission) October 21, 2015
In the Greek bailout crisis, there were major tensions between the members of the so-called Troika — the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF). In previous global bailouts, it was always the IMF that led the negotiations. In the case of Greece, the Commission took the lead and there were difference of opinion within the Troika — most noticeably, when the IMF declared the third bailout terms "unsustainable".
The politics of that bailout were complex, but centred on Germany — home to the European Central Bank in Frankfurt — putting pressure on its Eurozone partners to do everything to prevent a Grexit, which would have reduced confidence in the euro currency. Germany and the European Commission took the lead.
VIDEO: Who were the Eurozone's winners and losers in the financial crisis?https://t.co/5EncnwcrO3 pic.twitter.com/5DevR1D4gP
— Reuters Top News (@Reuters) October 21, 2015
That led to Greece being refused debt-relief — being allowed to have some of its debt written-off, as happened to Germany in the post-war years — and the Greek people being subject to swingeing austerity measures, including more taxation and a harsher pension regime that many believe was imposed too fast and without a sense of humanity.
Single Eurozone Voice
Power is at the heart of the euro and now the Commission has decided it wants to exert more of it. Currently, each member of the Eurozone has a representative on the board of the IMF, alongside other member nations.
What was announced on completing Europe's EMU? Timeline of tweets that used #deepeningEMU — https://t.co/juX7xQ66Jj pic.twitter.com/P0HW21xCo8
— DG ECFIN (@ecfin) October 22, 2015
But now the Commission is calling for there to be one single representative on the IMF Executive Board- replacing the seat of the Eurozone members. It said in a statement:
"The external representation of the euro area has not kept up with the currency area's increasing economic and financial weight. For instance, while the US dollar has a single strong representative in international economic and financial fora, the Member States of the euro area do not speak with one voice.
"The Commission therefore outlines a roadmap towards allowing euro area Member States to speak with one voice for their common interest.
"In particular, the Commission proposes to move to a unified representation for the euro area in the International Monetary Fund with the President of the Eurogroup as the representative for the euro area."
As the Greeks come to daily terms with harsh austerity measures hitting every family in the country and the Eurozone states attempt to keep the currency together amid a slow recovery from recession, this latest salvo from the Commission is likely to cause tempers to flare once again within the Eurozone.
