Europe should watch signals from Greece

Most Americans born after World War II take peace and democracy in Western Europe for granted. Enfolded in the European Union, France and Germany became allies and Spain absorbed democratic values. After the fall of the Berlin Wall, former communist countries joined the fold and embraced parliamentary norms.

But we forget all too easily that the 70 years since 1945 are an anomaly for Europe, whose previous 150 years of history were marked by war, ideological strife and revolution.

Last week’s Greek elections, in which voters chose a left-wing populist party in protest against nightmare economic conditions, should flash a warning.

If the foundations of Europe’s postwar order erode or are deliberately dismantled by misguided policies in Berlin and Brussels, that era of peace and democracy is at risk.

The Syriza party of the new Greek prime minister, Alexis Tsipras, won a near-majority by pledging to challenge the harsh austerity policies the European Union and the International Monetary Fund imposed on Greece in return for a 2010 bailout. Greece could not pay its debts in the tough years after the 2008 crash. In truth, the government and private borrowers had been profligate when European banks were lending freely.

But the terms of the bailout were so severe that Greek living standards plunged. Formerly, middle-class Greeks were forced to beg and live without heat. Unemployment surged to 25 percent, and – this is key – youth unemployment reached 60 percent (both figures have dropped only slightly in the last four years). Despite large cutbacks in public spending, services and workers, Greece’s economy and debt problems have gotten worse.

Had Greece not been part of the eurozone, it could have reached a less draconian bailout deal with the IMF, including some debt forgiveness, and might have devalued its currency to increase exports and tourism. But locked into the eurozone, it had to accept the terms Brussels imposed (and Germany demanded) that ruled out any such moderation.

The bailout came in the form of new loans. Meantime, European banks that had needlessly dispensed irresponsible loans to Greece over the previous years were hardly penalized.

What makes the Greek case so gripping is that it symbolizes a much wider challenge to the whole post-WWII “European project,” which involved binding formerly feuding nations into a union that would ensure democracy and prosperity. In his brilliant book, “Dark Continent”, Columbia University historian Mark Mazower noted what helped Western Europe move beyond its violent past was the social safety nets set up after the war. They lifted up segments of society that used to gravitate toward fascism or other forms of populist nationalism.

No question many European nations extended those safety nets beyond what their economies could sustain. But the austerity policies of the eurozone have squeezed too far in the opposite direction.

Youth unemployment in the eurozone hovers around 24 percent, and tops 53 percent in Spain, 44 percent in Italy and 25 percent in France. This is dangerous. Many unemployed youths in Europe come from minorities, and they could become prey for radical Islamists.

“No one (among the EU elites) cares about the state of youth unemployment,” Mazower told me in a phone interview. “We should be surprised that there is not more radicalism in Europe.”

But there is plenty of public frustration.

Voter anger has led to the rise of fringe parties, mostly right-wing, anti-immigration, and hostile to the European Union, in France, Britain, and elsewhere, while a party that openly attacks “liberal democracy” is in power in Hungary. The leader of France’s far-right National Front party, Marine Le Pen, came out on top in a poll last week of potential 2017 presidential candidates.

And – pay attention to this – Russia’s Vladimir Putin is openly encouraging parties that oppose the European Union. Le Pen got a $12 million loan from a Russian bank with links to the Kremlin, and Greece’s new premier openly supports Russian policy on Ukraine.

“I think radical parties can get 25 percent of the vote easily,” said Mazower, referring to parliamentary elections. “The real significance is how they transform society.”

In Britain, the small but growing U.K. Independence Party talks about leaving the European Union.

So the Greek crisis reveals challenges to Europe that go beyond financial issues. Tsipras doesn’t talk of leaving the union, but if Germany doesn’t cut Greece some slack, we may see a so-called Grexit – a Greek exit from the euro. That would give EU opponents on the far right a huge boost.

The European Union, says Mazower, was “set up to do two things: first to bring peace to Europe by ending the antagonism between Germany and France, and second, to restore democracy to Europe. The first has been a complete success, but the second is more interesting.”

“Even the fringe parties,” he added, “don’t proclaim the end of democracy, but where there is shaky ground as a result of austerity is this: It lets very right-wing parties pose as defenders of democracy by standing up against the European Union.”

Helped by Russia and Putin, those fringe parties, playing on economic fears, may push to split the union that has fostered liberal democracy in Europe for decades. The Greek election signals the direction in which Europe may be heading – if its leaders don’t watch out.