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Tsipras becomes unlikely hero for Europe's euroskeptics

European anti-establishment parties of all political colors are rallying behind Greek Prime Minister Alexis Tsipras in his stand-off with creditors, which threatens to force Athens out of the euro zone and undermine the single currency.

Parties with virtually nothing in common except a rejection of EU-imposed austerity are hoping public sympathy for Greece and its radical leftist leader will translate into a backlash against traditional parties and a boost in their own support.

Tsipras's battle has united parties as diverse as Spain's left-wing Podemos, the anti-immigrant Northern League and the grassroots 5-Star Movement in Italy, France's far-right National Front and the anti-EU United Kingdom Independence Party (UKIP).

They all cheered Tsipras for rejecting the creditors' cash-for-reforms offer on Saturday and calling a referendum on the proposal, a move that appalled the mainstream parties represented in the other 18 euro zone governments ...

Podemos ... said Tsipras was "exemplary" in calling a referendum in the face of "blackmail" on the part of the lenders.

"Today in Europe there are two opposing forces: austerity and democracy, government by the people or government by the markets and unelected bodies. We are with democracy, we are with the Greek people," the party said in a statement on Monday ...

(http://www.reuters.com/article/2015/06/29/us-eurozone-greece-eurosceptics-idUSKCN0P92F020150629)

Central Europe’s Grexit fears

... In Poland, the winner of that country’s recent presidential election, Andrzej Duda, has said he opposes joining the euro until Polish wages reach Western European levels. That’s at least a generation away: Poland’s average monthly salary is currently about a third of Germany’s ...

Duda’s party, the opposition Law and Justice, leads in the polls ahead of autumn parliamentary elections and is using decidedly anti-euro rhetoric. Beata Szydło, Law and Justice’s candidate for prime minister, has said it was “fortunate” that Poland did not enter the eurozone in 2012, as former Prime Minister Donald Tusk had called for in 2008.

“It is obvious that today enthusiasm for the common currency is lower, but that is a result of the situation in the eurozone,” Tusk told POLITICO ...

Hungary’s prime minister, Viktor Orbán, has a complicated relationship with the EU, and his government’s policy has been to assure Hungarians that the country will stick with its own currency, the forint, for the long-term. The crisis in Greece has only served to vindicate that move.

“Hungary is not in any mood to accept deeper integration,” said Sebastian Płóciennik, a European Union analyst at the Polish Institute for International Affairs. “There is no discussion about joining the eurozone quickly.”

The Czech Republic has not set a time for joining the euro, although 2020 is mentioned as a possible date. The public appetite for adopting the euro is low. An April Eurobarometer poll found 70 percent of Czechs were against joining (53 per cent of Poles were also opposed) ...

(http://www.politico.eu/article/central-europes-grexit-fears/)

Poland should join euro only after referendum, says president-elect's adviser

Poland should hold a referendum before joining the euro, a senior adviser to its incoming president said, heralding a more cautious approach to European integration from the European Union's biggest eastern economy.

Krzysztof Szczerski, foreign affairs adviser to president-elect Andrzej Duda, also signalled Poland would resist giving up more sovereignty to Brussels, and said it would fight EU green policies that harm the Polish economy by forcing it to burn less coal.

Poland has been a major beneficiary of EU funds and a supporter of integration, but that is shifting with the rise to prominence of the Law and Justice party, which is allied to the Conservative party of David Cameron.

Law and Justice candidate Mr Duda was the surprise winner of a presidential election in May, and opinion polls show the right-wing party, now in opposition, will form the next government after a parliamentary election in October.

"The decision on ceasing to mint one's own currency must be ... the nation's decision," Mr Szczerski told Reuters in an interview, saying that this required a "direct vote."

"This realistically means that a discussion about introducing the euro in Poland during President Duda's current term is pointless."

Poland has committed itself to joining the eurozone one day, but there is no legal requirement for it to hold a referendum on the issue. Opinion polls show if there was a vote on accession, it would be firmly rejected.

Echoing views expressed by Mr Cameron's government, and Hungary's ruling Fidesz party, Mr Szczerski said the EU should return more powers to national capitals instead of constantly moving towards ever-greater integration.

"The metaphor of European integration being like a bike is well-known: you can only go forward, there is no reverse gear. Which means we're in a conceptual trap," Mr Szczerski said. "In my view, now is the time for common sense to return to Europe" ...

(http://www.telegraph.co.uk/news/worldnews/europe/poland/11723365/Poland-should-join-euro-only-after-referendum-says-president-elects-adviser.html)

Greece does not mark the end of the euro debacle, merely the beginning

... Chirac and many others were appalled. I said that joining the euro would exacerbate recession in some countries, and that some would find themselves "trapped in a burning building with no exits" ...

Economics has few laws, which is why economic forecasts are so maddeningly unreliable. If it has one law, it is this: that if you fix together some things which naturally vary, such as interest rates and exchange rates, other things, such as unemployment and wages, will vary more instead. And in a single currency zone, which has exactly this effect, you can only get round these problems by paying big subsidies to poorly performing areas, and expecting workers to move in large numbers to better performing ones ...

There are three important truths for eurozone leaders to recognise today as they are forced to choose between the credibility of their currency and the permanence of European unity.

The first is that this crisis is not the fault of the Greek people ...

The responsibility for this crisis lies with their own former leaders and those around the EU who gave them euro membership when they were not remotely suited to it, a triumph of political desire over dispassionate economic analysis for which ordinary people are now paying the price.

It is no good now expecting Greeks to sit quietly in a burnt out room of the burning building I described 17 years ago. This brings us to the second truth: that this is not a short term crisis, but a permanent one, in which any temporary accommodation will soon be overtaken by events.

Greeks are being expected to do business and compete with the rest of the world at the same exchange rate and with the same interest rates as Germany, which would require their manufacturing, their education and their enterprise culture to be at least similar to those of Germany. In their lifetimes they are not going to be able to do that. This is not because there is something wrong with them; it is because they live in a different economic environment from Germany, and one that is not suited to being in the same currency.

In such circumstances, it is better to be able to leave sooner, with some generous support, than leave later with even greater resentment and failure.

The third and final truth will be the hardest one of all for those responsible for the euro to accept: that this is not just about one country. It is in Greece that the fundamental tensions created by a single currency have first broken through, because Greece is a particularly indebted and less competitive country. But the same tensions will ultimately surface in other nations facing a less immediate crisis but a similar prognosis.

Across southern Europe, governments such as those in Italy and Spain are making brave efforts to enact long overdue reforms. They might not achieve enough, however, for their people to prosper when required to compete equally with their northern neighbours. There is a clear risk that the economic performance of the south will diverge from, not converge with, the north. Unless this is averted in the coming years, it will bring problems to Europe for which Greece has only been a minor rehearsal.

In future decades, in the very business school where I spoke in 1998, I believe students will sit down to study the folly of extending a single currency too far. Sad though it will be to see it, their textbook is likely to say that the Greek debacle of 2015 was not the end of the euro crisis, but its real beginning.

(http://www.telegraph.co.uk/news/worldnews/europe/greece/11721838/Greece-does-not-mark-the-end-of-the-euro-debacle-merely-the-beginning.html)

The euro was doomed from the start

The Greek crisis epitomises the complete mess that Europe has made of the single currency

..I had the privilege of negotiating Britain’s opt-out from the then new European single currency in 1991. My abiding memory is how clear it was that the euro had nothing to do with economics and was a political project with a dubious rationale. Some representatives of other countries were openly sceptical, but their political masters were firmly in control.

..The creation of the euro has been an error of historic dimensions and done great harm to the EU, which in its first 40 years had brought economic prosperity to the citizens of the Continent. Then the less well-off countries benefited from the lowering of tariffs and the increase in internal trade. After the creation of the euro, however, economic growth slowed markedly. Poorer countries fared worse than the more prosperous countries, like Germany, which benefited from the new, weaker currency.

..Europe claims to be a rule-based organisation. But however else the eurozone is run, it is not run strictly according to its own rules.