On Sunday, the International Monetary Fund’s board signed off on its
part of the Greek bailout — a cool €30 billion, nearly a third of the
total. The IMF’s involvement is arguably essential to securing the
markets’ confidence in the deal and to reassuring the European
governments providing the rest of the cash. It may be the only
institution hard-hearted enough to hold the Greeks to account or turn
up the heat if they start to go astray.
But if the IMF’s presence is reassuring, it’s also rather
embarrassing for the EU. Two months ago Germany, France and the
European Central Bank were against any major IMF role in Greece. The
idea of an organisation traditionally dominated by the U.S. propping up
a Eurozone member (and so the Euro) was too much to bear. That was
Now there’s recognition that the EU simply can’t match
the IMF’s experience in disciplining dysfunctional economies — not to
mention ignoring the street protests this often involves. While
European finance ministers discussed a “stabilisation mechanism” to
fend off future crises this weekend, this also relies on a promise of
further funding from the IMF, potentially passing €200 billion. It
would be an exceedingly confident EU or IMF official who entirely ruled
out another IMF intervention in southern Europe this year.
if this can be avoided, the Greek bailout marks a blow to European
exceptionalism: the idea that the Union, although a friend of
multilateral institutions like the IMF and UN worldwide, can run its
own affairs without these organisations’ assistance (or interference).
annoys many African, Asian and Latin American observers who complain
that the EU urges them to do what multilateral organisations tell them
on everything from finances to human rights. They’ve taken some grim
satisfaction from events in Greece.
Pramit Pal Chauduri, a
commentator for India’s Hindustan Times, summarised his view of
Europe’s Mediterranean economies with a quotation from an African
diplomat based in Switzerland: “Africa begins south of Geneva. The
southern Europeans are just like us.”
While the Greek crisis is the biggest challenge
to European exceptionalism in recent years, it’s not the only one.
There have been set-backs in the Balkans. European plans to take over
responsibility for Kosovo from the UN ran into Russian opposition in
the Security Council — as well as splits within the EU over the
province’s status. While the EU has sent police and judges to Kosovo,
these are still nominally under UN oversight. European opponents of
Kosovo’s independence like Spain and Romania also backed a drive at the
UN General Assembly to put the matter to the International Court of
That might sound like a very European thing to do:
trying to resolve a tricky crisis through international law. It’s
actually an anomaly. Legal expert Cesare Romano points out that
“Western European states have long kept the ICJ at arm’s length, trying
to avoid appearing before it, both as plaintiffs and as defendants.”
The last time Britain submitted a case to the ICJ was in1972 — France
last did so in 1959. Belgium and Germany have gone to the Court in
other recent cases, but for much lower stakes than Kosovo’s future.
ICJ’s opinion is expected in the near future, but won’t be binding. The
fact remains that rather than proving that the EU can get by without
other multilateral institutions, the Kosovo case pushed it back on the
UN and ICJ. Now the Greek case has driven the Eurozone back on the IMF.
Advocates of a more autonomous EU will argue that these crises are just
stumbles on the way to a more coherent, effective and self-reliant
Is history really flowing that way?
Russia insists that it should have a stronger say in European security,
and some EU member states are prepared to take its proposals seriously.
Meanwhile, European governments are under mounting American pressure to
cede some of their voting rights at the IMF to the new Asian economic
The Greek finance minister admitted that China would
be “instrumental” at this weekend’s IMF talks. Eurozone policy-makers
may strive to ensure that they will not be dependent on the IMF, U.S.
and Asia in future financial crises. Even if they make real progress,
they must sense that Europe looks a little less exceptional than they
This article first appeared at www.globaleurope.com
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