George C Marshall, US Secretary of State at the end of WW 2, had vision. At a time when Europe was broke and didn’t have the ability to produce goods that could be turned into hard currency, he devised what came to be known as ‘The Marshall Plan’. The plan provided money to get things moving again…to ‘rehabilitate the economic structure of Europe’.
Marshall’s plan was designed to achieve recovery and sustainable growth. He recognised that Europe’s ‘rehabilitation’ would take time and effort – and cooperation. His plan succeeded not only because of the cash it provided, but because he insisted that no money would be forthcoming until nations had devised an acceptable plan showing how the money would be used. For the first time Europe had to work together as one economic unit. His plan was the foundation of modern day Europe.
Victorious Britain, on the other hand, was not part of the Marshall plan. The ‘Lend-Lease’ agreement Churchill had made with Roosevelt in 1941 meant that we had to pay back the US for all the equipment they had given us during the war. Not until the early sixties did we emerge from a period of severe austerity. Only in 1962 was Harold Macmillan able to say ‘we’ve never had it so good’, but the better times had been a long time coming. And Europe? Because of the Marshall plan Europe had been able to steal the march on us. They had booming economies and a significantly higher standard of living.
Today, the future of the European Union, forged out of Marshall’s plan of cooperation and support, is at risk because of the Greek debt crisis – unless European leaders can discover a Marshallian vision.
Whatever the causes of Greece’s problems, the EU not insisting on significant social and economic reform before they were allowed to join, the world banking crisis, or widespread corruption, the Greek debt crisis is potentially as great a challenge to European leaders as the rehabilitation of Europe at the end of WW 2 was to the ‘victorious powers’.
The arithmetic of the Greek problem is undeniable. The reality is that Greece cannot achieve enough growth to pay the interest on its debt. More loans carrying more interest liabilities will only compound the problem. Austerity measures being demanded by the IMF and the EU are sending the wrong message to the Greek people and will eventually ensure the collapse of the Euro – and perhaps the EU.
If the EU is to survive, the vast majority of Greek debt will have to be forgiven. The sooner EU leaders face up to this reality the better. If Greece is to prosper and contribute to the future success of the EU, it needs significant social, economic and political reform – and a Marshall plan to rehabilitate it economically. That plan should have the same condition as the original Marshall Plan – that ‘no money would be forthcoming until an acceptable plan showing how the money would be used’ had been produced.
Will it happen? Unfortunately our current crop of politicians are political chess players not visionaries. They’re pretending the Greek problem is one for the Euro zone and nothing to do with them. Like silly schoolboys they have their eyes shut and hands over their ears. The reality is that the Greek problem is as much a problem for Britain as any other European country. Greece needs a Marshall Plan not a Versailles treaty. We should be doing all we can to make that happen.