To what Extent was Greece Affected by the EU after World War II
The downfall of Greece had begun before the country itself knew it would exist. During World War II, the Greeks had to combat against the Albanians, Italians, Bulgarians and Germans. As a whole, in battling these four countries, around 85,000 Greeks were killed. In an excerpt from a speech to Reichstag on May 4, 1941 Adolf Hitler said For the sake of historical truth I must verify that only the Greeks, of all the adversaries who confronted us, fought with bold courage and highest disregard of death. Prior to the crisis’ that would arise due to the European Union, Greece was a country known for its determination and will. Eventually, Greece as a nation would deteriorate and enter a state of unsustainable debt, losing their original determination and will. After WWII, there was a widespread want for peace. In 1944, before WWII ended, The Benelux Treaty was implemented. This treaty was an economic union between Belgium, the Netherlands, and Luxembourg. The Benelux Treaty caught the attention of Europeans in the idea of unity as a collective group. French Foreign Minister Robert Schuman presented the idea for an organized Europe, this idea eventually led to the creation of the European Economic Community (EEC).
Greece’s journey in the European Union was rough and problematic from the start. Greece heavily relied on the United States after WWII. On June 3, 1948, the US launched the Marshall Plan. This plan was an economic aid to help rebuild European countries. The US gave 700 million dollars to Greece to boost their devastated economy. When the economic aid from the US came to an end around the late 1950’s, Greece submitted its application for the accession into the European Economic Community in June 1959. Konstantimos Karamanlis, the prime minister of Greece, aimed to make Greece a fully integrated member of the EEC. On July 12, 1975, a letter to the president of the European Union Ministerial Council and Minister of Foreign Affairs of Ireland, G. Fitzgerald, was sent out on the behalf of Greece’s desired full accession to the EEC. There were many reasons as to why Greece had wished to join this European Community. To begin, Greece viewed this community as having established the new modern set of ideas, beliefs, and rules that could provide stability to their political systems and institutions. The Greek government also believed that joining this community would be essential to modernizing their society and economy. There was common goal for peace that possibly could have been achieved through the economic prosperity and political integration of this new union. Lastly, Greece knew that this European integration would have an impact on the world, and they wanted be a part of this movement. The EEC felt that Greece should undergo a transition period prior to their accession, to allow their nation to implement needed economic reforms. Due to the military takeover of Greece by the Junta on April 21, 1967, the accession process was put on pause until Greece was able to achieve a democracy within its nation. Greece successfully joined the European Economic Community in 1981, in efforts to strengthen their economic relations with Western Europe.
On February 7, 1992, the members of the European Economic Community signed the Maastricht Treaty. The treaty launched the Economic and Monetary Union, which ultimately became, what it is known as today, The European Union. The biggest issue Greece would have to face regarding the European Union was in the makings??”The Euro. In 1999, the Euro currency was introduced. Due to Greece’s inability to meet the fiscal criteria (which consisted of an inflation rate below 1.5%, a budget deficit below 3%, and debt-to-GDP ratio below 60%) they were unable to change their currency to the Euro until 2001. Greece had to lie about their economic finances to be able to join the Eurozone. With the help of the Goldman Sachs bank in the US, Greece was able to hide portions of their debt to pass the fiscal criteria. The prime minister of Greece, Costas Simitis said We all know that our inclusion in EMU [European Monetary Union] ensures for us greater stability and opens up horizons. Greece had put a massive amount of faith and hope in the European Union, enabling their nation to be very vulnerable in their decision making. The financial markets within Europe had created an acronym to label the in debt, and unstable countries of Europe. The acronym was PIGS. The P stood for Portugal, the I for Ireland, the G for Greece, and the S for Spain. These four nations were known for their large and recurring economic struggles throughout Europe.
The European Union itself attempted to smoothly integrate 27 different countries. The issue arises when you attempt to combine multiple different economies that are all at different levels, along with nations that have very different perspectives regarding economics as a whole. The European Union was a failure due to its inability to be flexible. For example, If Greece underwent a humongous crisis, their currency would not change or fluctuate to aid in their personal economic grievances. The Euro has to support multiple countries, so it is unable to tend to each individual country’s needs. Instead of the European Union altering the Euro itself, Greece is left to internally devalue itself. This means lower wages for Greek workers, along with lowering the prices on Greek products. Greek citizens who struggle with debt find it near impossible to pay their debts off due to their cut in pay.
A major setback for Greece was the austerity policies forced upon their country by the Troika, which was a group of members from the European Central Bank, International Monetary Fund, and the European Commission. The Troika’s austerity policies were forced upon nations like Greece and Spain, and consisted of raising tax rates and cutting down government spending. As a result, to these policies, workers were paid less which in turn damaged the economy. If workers cannot make a stable income, they will not spend as much of their money on goods and services. The circulation and flow of money was interrupted by this change of dynamics and businesses in Greece were not as successful and began to decline. Germany blames the drop of GDP percentages, in reference to the PIGS, on corruption within those nations, wasteful spending, and inefficient and lazy labor markets. When in reality, the drop in GDP percentages is correlated to the Euro currency and its lack of flexibility. This lack of flexibility made it impractical for countries to adapt to the rapid changing economic circumstances.
A major flaw of the European Union derives from an overly-hyped up and misguided hope that the outcomes of this unified economic and political union would be prosperous and successful. Many thought that the shared Euro currency would foster the idea of coming together as one large unified front, but instead the common currency caused a divide between the nations. For example, even though German and Greek economies and banks are based off of the Euro, money flows out of the Greek banks and into the German banks. This is simply due to the fact that most of the Europeans believe that the German banks were more stable. As a result of this transferring of money, weaker banks become less exploited and less recognized.
During the ending years of World War II, Greece had shown its strength and determination in their resistance, and they had been recognized for their efforts. Economically, Greece had faced many obstacles. Greece had heavily relied on financial support from not only the United States, but also neighboring European countries. They were unable to become full members of the European Economic Community, until after their transition period. During this transition period, Greece was influenced by the EEC to implement economic reforms. Their full integration to the EEC was delayed due to the militaristic crisis, where the Junta took over Greece. After this crisis, Greece was finally able to become an official member of this European Community. The European Union, in 1999, created a common currency amongst its members, in which Greece was forced to undergo another waiting period until they could pass the fiscal criteria. After their complete joining of the EU and adopting the currency in 2001, Greece was faced with economic disparity due to the lack of flexibility within the Euro currency itself.
The austerity policies placed upon Greece by the Troika had, in turn, disrupted the flow of money within their nation causing an economic crisis. Greece was a country who had seemed to face many economic struggles and was unable to dig themselves out of their debt. Greece made the mistake of putting all of their hope into a European Community, believing that union would save the day. To a large extent, Greece was affected by the European Union after WWII. Although Greece had desperately wanted to join the EU and had lied to receive its admission, the European Union had not been able to make the effort to provide well planned out solutions to the issues pertaining to Greece. The EU’s lack of effort and responsibility is what affected Greece the most. Greece was so distracted and blinded by the end goal of recognition on the world stage as a strong and unified European Community, that they did not see the possible warnings to their current economic state of loss, deterioration, and an inability to make a decision whether or not to leave the European Union.