The biggest and most important thing that the EU has achieved has been 70 years of peace. This is a huge achievement and should not be taken for granted. If I lived in Greece I might well feel that the sacrifices made in the Second World War had been a waste of time. Germany has ended up deciding what the government of the country can and cannot do. A huge mandate in a referendum has been treated as if it was an irrelevance. Worse it has been treated as if the people have betrayed the trust of their real governors. Those who own and control European finances. The idea of democracy is that the powers that be need the approval of the people not the other way around.
The second most important thing that EU has achieved has been a degree of economic security. Instead of allowing a race to the bottom where every nation passes its own set of laws about health and safety or rights at work there has been a genuine attempt to establish and implement a reasonable set of standards across the whole of Europe. This is one of the prime reasons why the right in this country really doesn't like the EU. Instead of just being a free trade block it also tries to be a place where certain standards and rights are maintained by all countries so that no one can undercut anyone else on price by putting its working people at risk.
This economic security is utterly meaningless when 26% of the population of Greece is out of work and 24% of the population of Spain. It is equally meaningless when you can't be sure that you can obtain your own money from your bank. Or indeed whether your bank will still be in business next week.
The EU has always prided itself on having the European Social Fund which sets out to help build up parts of Europe which need investment in order to grow. Since the Euro has been introduced that flow of income has gone in the opposite direction. A single currency that is dominated by a single nation has helped Germany enormously by holding down the price of its currency and making it able to sell things cheaply abroad. At the same time it has harmed every other member of that currency group. They either have to have the same level of inflation as Germany or discover that what they make and sell becomes too expensive and they export their jobs.
The morality tale that we are being sold is that the feckless Greeks spent too much money in good times and are now paying the price. What has actually happened is that the Greek economy and the German economy have been tied together more surely than if they both went over to the gold standard. There is no flexibility left in the Greek management of the economy. Everyone in the country who owes anything - for instance anyone with a mortgage - owes it in Euros. If the Greeks left the Euro then the only way out would have been not just for the government to default on all its loans but for every business to default, every citizen with a car loan to go bankrupt and every one of its banks to collapse.
In these circumstances there is no point in accusing the Greek Prime Minister of selling out by accepting Germany's terms. There was quite simply no choice. Every pensioner in the country would have been left trying to get by on a few worthless drachma whilst every shop demanded payment in hard currency.
So the Greeks have been forced into further austerity. This doesn't just make Greek people poorer. It also reduces demand for every other country in the EU. At the same time the Spanish, the Italians, the Irish, and the French are also trying to juggle the necessity to impose a degree of austerity in order to pay their debts in a currency that is valued mainly against the German economy. Their cutbacks also reduce EU demand. A single currency has created a built in deficit of demand across the whole of the EU. The slow growth or actual decline which this automatically produces makes debts very hard to pay off. Try paying off a mortgage if your income never rises. Try paying it off if you become unemployed. The impossibility of this should be obvious.
The harm this lack of EU growth is doing to Germany's own economy should also be obvious. And that is the irony with all this. The European wide problem of shortage of employment is most easily fixed by a European wide solution. The way to grow an economy is to print money, invest it and then to put people to work on making the things that they can spend the money you have just printed on buying. You can no longer apply this solution in one single country because too much of the money you print might go on imports. But something the size of the EU can expand the whole of its economy at the same time very successfully. It did it from 1945 to 1970 and produced what the French call the thirty glorious years.
Consider the current state of the world economy. The fastest growing economy is China. The government controls and guides the economy, expanding it when it feels it is wise. In the West the fastest growing large economy is the USA. It is the country which printed the most money out of thin air via quantitative easing in order to head off the crisis. The UK is also growing fast. The reason is not austerity budgets but the opposite. We have printed £370 billion of funding and the government used much of it for a pre election boom. Japan applied austerity politics for thirty years. It ended up with debts higher than Greece as a percentage of GDP ( no one mentions that do they!) and has now given up on a failed economic theory and is going for growth. Because of right wing German economic theories the EU has been the slowest economic area to go for quantitative easing. As a result it has been the slowest growing block and the economies of the many of its member states are in a dreadful state.
The EU is a wonderful forward looking idea that we are going to need to fight hard to keep alive in the next couple of years. German right wing economic theories are not wonderful. They are the biggest threat to European prosperity that has ever existed. The EU has a simple way out of its problems and can get back to successful growth very easily. It has turned its back on that approach and gone for punishing an entire country to make sure that others pay up quietly. This is a high risk strategy and one which abandons all the morality on which the EU has been built up.
There has been a lot of talk lately about the need to avoid creating moral hazard. The result has been we have created a much more dangerous thing.