In 2011 when the euro area came through its worst crisis on doubt about the quality of its sovereign debt, many commentators wondered whether the circumstances could terminate the very existence of the euro. As a result, the top priority for Brussels and the Merkel-Sarkozy tandem, say “Merkozy”, had been to avoid any secession from the common currency zone lest this could aggravate the crisis to unknown extent and completely sap the EU’s future, if there was one.
Today, three years and a half later, the quasi-dogma that said nobody can leave the euro area has vanished after German Chancellor Angela Merkel considered an exit of Greece – the “Grexit” – would be “manageable”. The EU is still much rejected as the divide between the people and Brussels has kept growing constantly, especially since the Lisbon Treaty that, opponents said, flouted the “no” vote in 2005 of the French and Dutch people. However the possibility of Grexit has shown the EU has strengthened actually.
First, the disruption on the financial markets has been quite limited so far, chiefly when considering the major indexes dropped from a high level in the light of macro-economic reality. Second, Merkel’s comments did not trigger a political crisis within the euro area; and they were clearly calculated and certainly not spontaneous. French President François Hollande agreed with Merkel, saying it was up to the Greek people to decide whether they wanted to stay. Third, there seems to be no incoming threat on the EU’s sovereign debt liable to spread 2011-like panic. Fourth, a “Grexit” brings two options: the former would be a Grexit and a subsequently stabilized euro area that got rid of the Greek uncertainty; the latter would be no Grexit and an ultimate victory of Germany’s budgetary orthodoxy with a clear message to all euro participating countries: austerity is unavoidable.
In the end, unless the tidal wave of popular discontent elects anti-euro candidates to top posts like what can happen in France with the Front National, Brussels, and Germany in the first place, will manage to consolidate themselves on a long-term basis.