Greece is learning what giving up sovereignty really means

Absent its own currency and the ability to conduct an independent monetary policy, no country can be really sovereign

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Pat MurphyAs I write this, the Greek drama is at its umpteenth crisis point. Will it go over the brink this time? If it does, could it conceivably take the euro with it? And what in heaven’s name is going on in Europe – purportedly the world’s most sophisticated polity.

Theoretically, the 1648 Peace of Westphalia was supposed to bring stability to the continent by sanctifying the co-existence of sovereign states and abjuring interference in each other’s domestic affairs. If things went to plan, borders would’ve been more or less frozen and wars a thing of the past. Or if that sounds too ambitious, wars would certainly have become less frequent and deadly.

Things, however, didn’t quite work out that way. From the War of the Grand Alliance to the War of the Spanish Succession to the Seven Years’ War to the Napoleonic Wars to the First and Second World Wars, conflict was the norm rather than the exception.

Another way of looking at the tumult is to think about how the map changed.

For over 800 years, the Holy Roman Empire waxed and waned as a multi-ethnic complex sprawling over large chunks of Central Europe. Eventually, though, Emperor Francis II’s defeat by Napoleon at the 1805 Battle of Austerlitz put an end to the story. However, the related Austrian Empire continued in business until 1918.

And there’s also been significant fluidity in the definition of what constitutes a nation. Although we may be tempted to perceive them as centuries-old entities, some European states are relatively young in terms of their present incarnations.

For instance, what we think of as modern Germany didn’t come into being until 1871, courtesy of Otto von Bismarck’s ascendant Prussia. Modern Italy is approximately the same age, and modern Belgium is a mere four decades older.

Then there’s the states that came and went within the past century. Yugoslavia, formed after the post-First World War break-up of the Austrian Empire, dissolved in bloodshed in the 1990s.

Czechoslovakia, born the same way, had a similar, albeit more benign, fate. When the time came to split, the respective parties arranged a civilized divorce that produced the independent states of the Czech Republic and Slovakia.

Of course, Westphalia’s inability to generate an age of tranquillity doesn’t mean that it was a bad idea. It just wasn’t enough to permanently ward off the intoxicating forces of territorial ambition, historical grievance, ethnic nationalism and ideology.

So after 1945, another idea germinated. Westphalia was old hat and needed to be supplanted by the concept of supranationalism. Hitherto sovereign states would cede power to a higher authority, old rivalries would be suppressed, wise planners would lay down the rules, and general peace and prosperity would ensue.

Initially established as the European Coal and Steel Community, the European version of the supranational model soon evolved into the European Economic Community before ultimately morphing into the current European Union (EU). Along the way, its raison d’etre seemed to change from being a free trade area to being a politico-economic union – if you like, a wannabe United States of Europe.

To be fair, though, this idea of an “ever closer union” wasn’t conjured out of thin air. It was always part of the plan, but just a part that most people – many politicians included – dismissed as mere verbiage. And that was a mistake.

Indeed, one of the most perplexing sights from Greece’s predicament is the apparently heartfelt lament that the EU is disregarding the democratically expressed will of the sovereign Greek people. But there’s a logical problem with that complaint. Simply put, Greece is no longer a sovereign state in the traditional sense of the term.

As an EU member, Greece automatically ceded significant authority. And when it joined the Eurozone, it doubled down on that cession. Absent its own currency and the ability to conduct an independent monetary policy, no country can be really sovereign.

History provides a number of lessons. One is that it helps to be lucky in the choice of neighbours. Another is that, unless you can count on a generous benefactor, you’ve ultimately got to pay your own way.

The late American economist Herb Stein sagely observed that “If something cannot go on forever, it will stop.” Greece is in the process of finding that out.

Troy Media columnist Pat Murphy casts a history buff’s eye at the goings-on in our world. Never cynical – well perhaps a little bit.

© Troy Media


giving up sovereignty

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